A 6-Step Crash Course to Customer Segmentation

Evergage Blog

Ideas and Strategies for Real-Time Personalization
A 6-Step Crash Course to Customer Segmentation

June 15, 2014 by

“What’s in it for me?”

That’s the fundamental question that drives all commerce online. Both B2B and B2C audiences have high expectations from brands and expect personalization as the norm rather than the exception. At any given time, a marketer’s role is to reach the right audiences at exactly the right time in their buying journeys.

Without a systematic process for user research and continuous analysis, you are likely throwing darts in the dark. While you’ll unlikely learn about every customer on a 1:1 level, you will start to uncover key trends and patterns that organize your data into key segments. These segments will help you deliver more customized, personalized, and tailored marketing messages.

Here's how to get started.

Step 1: Know the Definition

What exactly is a customer segment? To create an effective personalization strategy, you need an ironclad definition of this concept. According to TechTarget -

“Customer segmentation is the practice of dividing a customer base into groups of individuals that are similar in specific ways relevant to marketing such as age, gender, interests, spending habits, and so on.”

They’re groups of people who demonstrate similar buying patterns based on shared characteristics -- which brings us to our next step in creating a customer segmentation strategy.

Step 2: Choose Variables Strategically

Variables are the heart and soul of customer segmentation. That’s why qualitative and quantitative user research are so important -- as marketers, sales leaders, and entrepreneurs, you’ll start to develop stories around your best customers.

You can then break down these stories into even more granular details -- variables, which may be linked to demographic characteristics, buying patterns, or mode of discovery for your business and product. Here are some example variables to consider as part of your segmentation strategy:

Screen Shot 2014-08-22 at 3.28.48 PM

Screen Shot 2014-08-22 at 3.30.01 PM

Pick variables that are most important to your business strategy. Start by creating a list and assigning properties to each and every user. These customer details will be invaluable to your long-term segmentation strategy.

Step 3: Apply a Scoring Method

All prospects are not created equally. That’s why it’s important to implement a scoring system that assigns a higher weight to some audience characteristics than others.

This priority system will help your sales and marketing teams determine which leads are worth pursuing (and which aren’t). You’ll empower your organization to make the most out of its (very) finite time and resources.

Step 4: Create a Feedback Loop

The first stage of your lead scoring methodology will be an educated guess -- a good one, but one that needs validation.

No matter what system you’re implementing -- across marketing automation and CRM platforms -- there needs to be an opportunity for stakeholders to validate your marketing assumptions.

How does predicted data compare with actual data?

To ensure the validity, impact, and efficiency of your segmentation strategy, you need to focus on the answer to this question.

Step 5: Evaluate Software, Systems, and Integrations

Customer segmentation is a process that is impossible to automate through spreadsheets and disparate systems. You need to choose software that supports your business’s unique needs, workflows, quantitative, and feedback loop requirements.

You may need to combine multiple platforms together (i.e. Salesforce for CRM and Evergage for real-time personalization), which will require varying degrees of configuration and integration.

Step 6: Refine Your Marketing Goals

Always be learning. Always be testing. Always look for ways to improve your customer segmentation programs. As you collect more data and rely upon your customer segments for your marketing automation programs, you’ll start to see signs of success -- as well as areas in which you’ve missed the mark.

It’s important to evaluate -- and re-evaluate -- your marketing goals so that you’re constantly focusing on the right variables to guide your marketing to sales strategy. You may ultimately find that you need to re-define your approach in step 2. You might also decide to revamp your scoring system.

That's okay.

Learning and growing are key pillars of success with segmentation.

Final Thoughts: Be Agile

Your customer database is forever changing. As time passes, you’ll make refinements to your business model and customer base. Embrace these changes, and give yourself the flexibility to adapt. Marketing is a goal-driven process -- laser focus will help you achieve optimal results.

Share This