Think Small, Go Big—How Micro-segmentation Produces Macro Results
Considering our increasingly nuanced understanding of consumer behavior and the saturation of media and retail environments, it’s no wonder marketers are seeking new ways of reaching their customers. One approach that has proven successful–micro-segmentation–uses available data to focus marketing efforts on niche groups of consumers who behave like your existing customers and similar groups within that audience.
DIG DEEP WITH MICRO-SEGMENTATION
If you cast a wide net, you may catch a lot of fish. The problem with that method is this — if you’re after a specific type of fish you may end up with a lot of fish you don’t need or want. A broad method used for a narrow purpose is often a waste of time and resources.
Justifying ad spend is challenging enough, let alone the return on ad spend (ROAS), or ROI, when your focus is too broad. If your target audience isn’t well-defined, it’s difficult to demonstrate whether your advertising has truly made an impact.
However, this is not the case with micro-segmentation, or the process of creating hyper-targeted lookalike audience segments from data you should already have on hand. Micro-segmentation goes deep where segmentation stays wide. Instead of limiting what you know and how you target customers to demographics alone, micro-segmentation layers on additional attributes.
For example, take these good, better and best methodologies into consideration. Ask yourself — which do I use now, and which should I be using?
GOOD: You know and leverage customer demographics (age, gender and income) to segment your marketing efforts accordingly.
BETTER: You not only know your customer demographics, but you have developed and use customer personas (profiles with lifestyle, interest and patterns of behavior) to further segment your marketing efforts.
BEST: You know your customer demographics, you have developed customer personas, and you leverage data to continually add attributes to further segment your customers into needs-based target groups.
By targeting micro-segmented audiences, you reduce the amount of marketing capital required to reach your most relevant and desired customers.
WORTH THE EFFORT
Ultimately, the purpose of micro-segmentation is to increase customer engagement, conversion and ROI by reaching the right customers with the right message in the right place at the right time.
To obtain the data you need to implement micro-segmentation, look to your company POS system, CRM, eCommerce store, Google Analytics account, or even your social media platforms. Each is bursting with insightful data on your customers — who they are and what, when, where and why they buy what they do.
DESIGN WITH THE CONSUMER IN MIND
Design thinking has taught us about the importance of taking a human-centered approach to any experience — be it immersive, interactive or sensorial. What is often overshadowed, however, is the depth to which you need to understand the person at the center.
The key to this approach is to use what you know to focus on audiences that will most readily engage with your product or service. These audiences may not always be apparent at first, but by surfacing and analyzing your data you’ll find the answers you seek.
The key takeaway is this — your marketing should be focused on the product or service attributes that connect what your product or service offers to those seeking it (the benefit).
IT’S NOT YOU
An important yet often overlooked aspect of a successful marketing strategy is this simple truth — it’s not about you (the business owner, CMO, marketing director or brand manager). Never is this truer than with micro-segmentation. I have written a number of articles on the importance of brand values, on leveraging your values to activate consumers who align to them, on reframing your strategy to win consumer hearts and minds, and more.
While these things remain critical to both meaningful brand positioning and successful consumer activation, your values serve more to attract and influence than they do to convert. Your product or service still has to taste good or actually do the thing the customer expects it to do.
Your intuition, regardless of accuracy, is not as precise as the consumer insights available in your data. Creativity, artistic expression, clever copy, skillfully designed visuals and a point of view still have their value. But they should serve to complement a data-based approach to marketing to your audience.
When you understand your customer at this depth, your marketing efforts will naturally become much more relevant to your target audience. Your creative, graphics and imagery better reflect your customers and their lifestyle, while your messaging will better address their specific need-states.
Like most challenges, micro-segmentation is also an opportunity. It takes resources and time to be successful, but the potential rewards are worth the effort.
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