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How to find growth from customer segmentation with lookalikes

Do not miss this audience that’s right under your nose! Why choosing target audiences that look like your best customers from the data you already have is a great additional segment to tap into.

If you do an Amazon search for a vacuum, hundreds of options show up. Which one would you go for? As customers, we are more likely to buy products from companies we have heard about. This general knowledge comes from advertisements and marketing campaigns.

While the concept seems easy, demand generating campaigns require a lot of work and thoughtfulness. Think about these… According to research, it takes an average of 8 touches to make a sale with a new prospect. Forbes also stated that it costs 5x more to attract new customers. Given the many touchpoints needed and the cost it’s going to take to acquire new leads, it is important to ensure that you are going for an audience with a high conversion chance.

The way you target your customers can determine your engagement and traffic scores. People prefer a personalized experience — where they are the center of attention. For a broad instance, there is no point in advertising a service offered in the United States only to Canada. Narrowly, it can be very costly to advertise to those that have opted out.

Customer Segmentation and Lookalike Marketing

There are two approaches you can take: Customer Segmentation and Lookalike Marketing. Customer Segmentation divides your client base into groups based on several factors, including geographic locations, age, gender, activity, interests, and preferences. Lookalike Marketing refers to using existing customer profiles and assuming that people with slightly matching attributes will similarly respond to your advertisements. With clear customer segments defined by the data you have, leveraging Lookalike Audiences becomes more scientific and cost-efficient.

Both techniques can play a major role in improving your performance and helping your business grow. Lookalike Audience has shown to have a higher click-through rate of 90% of the time than other audiences.This is clearly indicative of higher traffic from targeted campaigns.

How to Create a Lookalike Audience

1. Use the vast amount of data that your eCommerce website or application generates.

2. Choose a source audience that you will base your Lookalike Audience on. You can choose website visitors, customer lists, etc.

3. Look for patterns or common qualities (e.g., demographic information, purchases, or interests) and divide them into groups.

4. Once you have your main customer groups, you can assign these categories to the remaining audience through Lookalike Marketing. This data-driven segmentation can help increase your profit margins by improving your engagement.

5. Doesn’t look like it is specific enough? Now go deeper into the personas that represent each group? What about segements?

The more people clicking on your advertisements, the better the chances of making more sales. Demand generation experts will tell you that it is a numbers game. I still have the lesson in my head, “You need to talk to a hundred to get one.” You can make several advertisement campaigns, each catering to one of your audience’s segments. The clicks on these advertisements can lead to different landing pages designed specifically for a certain group of people. If your customer finds the products in your demand generation techniques interesting, they tend to dive further into your eCommerce store and buy items.

Numerous big companies, especially those that moved stores online early, have employed these techniques to grow their customer base even through these tough times. Compared to regular marketing and demand generation strategies, a more personalized advertisement is more appreciated by the users. Therefore, if you are an eCommerce store looking to increase your audience, data-driven customer segmentation is an optimal option.

If you want to learn more about how we at VIEWN implements these strategies, talk to us. Our CDP platform can do the heavy-lifting execution for you.

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Areeya Lila

Marketing AI Tech Entrepreneur and Mom of twins and a whippet. Startup advisor, D&I, AI-bias, sustainability, scuba diving & paddle boarder.