Customer Segmentation - A Prerequisite for Marketing Campaigns

With the advent of the digital era, marketing players have greater reach, which works in their favor when rightly used. However, the downside is, you will be trailing the race and are seen as copying someone else’s strategy when your competition reaches your customer first.

Hence one can't afford to spend a substantial amount of time in designing a campaign while the opportunity has an expiration date less than that of a perishable good. If marketers want to be on top of their game, they should do a bit of prior work, preparatory work if you will, so that churning out campaigns will only be a click away when the time is right.

Marketers can study their customer needs and preferences, say when it comes to disseminating the information which channel is preferred (email, Facebook, Instagram), which day of the week and time of the day customers react to your message, etc and categorize their existing user base. This preparation will help them generate a lookalike audience by overlaying these conditions and contacting them when the opportunity presents itself.

If we have to formalize the above process into steps, the following method is a good place to start –

• Study the historic behavior to identify distinct groups
• Establish rules and conditions which define these groups
• Conduct experiments (campaigns) targeting these groups to see if the behavior is repeated
• Overlay these rules on the incoming user base and keep revising the segment definitions
• Once the definition is finalized, use them for instantly targeting customers

Now, if you are launching a new product range into the market, you can easily identify the segment of customers who have always bought items from the new arrivals category – running an email campaign to them will be productive. The same can be done to identify customers who prefer certain offer buckets, or product categories, etc.

Another advantage of this process is that the customers feel valued as they are promptly receiving information and that too on a priority basis. When the segment targeting becomes much more specific with time, the response rates will also increase automatically.

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