When it comes to communicating with customers and leads, the worst thing you can do is take a one-size-fits-all approach. Think about it: your customers aren’t clones of one another – they have different needs, interests, backgrounds, etc. – so why would they respond to the same marketing messages?
Segmenting your audience based on what you know about them enables you to make more impact with your marketing communications so that you can scale your business effectively. In this blog, we will discuss 10 segmentation ideas to get you started.
What is segmentation?
Segmentation is the process of organizing your customers into groups depending on their demographic, firmographic, behavior, transactional history, and more, to enable more meaningful interactions. By tailoring and personalizing marketing and sales communications based on what you know about your customers, you will improve engagement and boost conversions.
Ortto’s powerful audience segmentation allows you to target audiences based on any combination of demographic, firmographic, behavioral, event-based, and transactional data. To learn about how to set up customer segments in Ortto, read our blog.
The benefits of segmenting your customers
The benefits of customer segmentation are tenfold. Below are just a few:
Organizing your customers/leads means you can curate tailored, relevant messaging. It can help to determine the type of content you send to users, the intention of the content, and the channel through which the content is delivered.
Tailoring content to suit customers’ needs and pain points will resonate with them more and improve engagement.
Better understanding your customer base will help you to identify opportunities in terms of upgrading/upselling/cross-selling and in regards to refining your product/service offering
Better communication with your customers will reduce your unsubscribe rate.
The benefits listed above paint a clear picture: segmenting your audience can lead to business growth. Below are 10 audience segmentation ideas to spark inspiration.
10 audience segmentation use cases
1. Build audience segments for different email lists
When it comes to email marketing, segmenting your audience is best practice. For instance, you should only send your email newsletter to subscribers that have explicitly opted in to receive the messages you’re sending, whether that’s a regular newsletter or information like shipping alerts or renewal reminders. Not only will this improve the open rate and click-through rate, but it will also improve email deliverability, meaning your emails are less likely to land in your recipients’ spam folders. Learn more about email deliverability in our blog post.
You should also create different audience lists for SMS subscribers – those that have explicitly opted in to receive SMS communications from you – as well as a list of your customers and a list of leads. This way, you can create and distribute content that is relevant to that list.
For example, to your list of leads, you may send middle of the funnel (MOFU) content like educational resources (blog posts, downloadable guides), discounts, webinar/event invites, demos, testimonials, etc., to guide them to conversion. Alternatively, you may send customers information like product feature updates, company news, changes to processes, etc.
2. Use firmographic and technographic information to build a list of leads who are interested in a new integration or product feature
You can target customers who will be interested in a new integration or product feature by segmenting your audience based on firmographic and technographic information.
For example, let’s say you're a B2C meditation app like Calm or Headspace and you're about to launch a B2B arm, giving employers the opportunity to give their employees access to on-demand meditations. You could use segmentation to build a list of B2B leads from your database using a set of variables like:
1. Existing calm customer
2. Logged in in the last 90 days
3. Director, VP, or C-Suite title
You could then create a further segment with the added variable:
4. Company size 100+
This would give you one list of qualified leads to announce the new offering to, and offer them the opportunity to be part of the beta test or give them a founding member discount. Plus you'll have a smaller segment of high-value, qualified leads for the sales team to reach out to directly.
3. Create segments based on engagement
Another way to slice and dice your customer data is by looking at engagement. Ortto users can measure engagement scores by setting up variables and using filters to create segments like ‘4 stars’ or ‘low engagement’.
For example, you may use a number of variables including ‘Last seen more than 30 days ago’ and ‘Engagement score of less than 3’ and save it as ‘Slipping people’. You may also make an audience of ‘Highly engaged’ people, and analyze what those highly-engaged users have in common. With that intel, you can prompt the slipping users to take those same actions.
4. Identify your ‘ideal’ customer based on MRR/CLV
SaaS businesses can create segments based on monthly recurring revenue (MRR) and ecommerce businesses can look at customer lifetime value (CLV). Doing so means you can start to identify common attributes of your top-performing customers to develop an ‘ideal’ buyer persona and create specific campaigns that target lookalike audiences on Facebook and Google.
For example, let’s say you’re a DTC alcohol delivery service like Drizly. You can create a segment of your best customers using filters like:
Has placed an order in the last 30 days
Average order value of $100+
Engagement score of 4 stars +
You can then look at this segment to find out things like:
Demographic and geographic information
Time of day emails are opened
Average open rate, click rate, and unsubscribe rate
Or you can create a custom dashboard to track metrics that are important to your business. Over time, this will give you a deeper understanding of what your ideal customers look like. You can also sync this segment to your Facebook, Twitter, or Google Ads account and target a lookalike audience to increase the quality of your leads.
5. Create segments based on geographic information and web pages viewed
Look at geographic location and product activity when creating segments to unearth innovative ways to connect with your users with timely and relevant messages. For example, Ortto customer TAXIBOX created a segment of people in Melbourne who, during the lockdown, had been looking at their interstate move pages. TAXIBOX reached out to them to say that they were still operating and to point out that people are still able to move interstate despite the lockdown. This is an example of sophisticated segmentation that crosses multiple variables and yields results. Check out the TAXIBOX case study here.
6. Send and create content based on demographic and firmographic information
Audience segmentation can inform a content marketing strategy to help boost lead generation and customer engagement. For example, say that you’re a SaaS company that offers a suite of cloud-based HR solutions to support key employee processes: recruitment, onboarding, performance management, payroll, expenses, etc. You could segment your leads and customers by job title, organization size and industry and send content that will be most relevant and interesting to those lists. The content would educate your audience about your relevant product modules and guide them down the funnel to conversion.
For example, if you have a webinar on EOFY best practices for SMBs, you could create a list of payroll professionals working in a SMB and only send invitations to that group. The attendance may be lower but could result in a higher conversion rate and a better experience for your customers and leads. Or, say you had an eBook on recruiting during a recession, you could target recruitment professionals specifically (and perhaps HR personnel in startups and scaleups when there isn’t a dedicated recruitment resource in-house). Because you are addressing topical challenges, the audience will resonate with your content and be more likely to download it.
Segmenting by job title and industry can also help with content ideation. Say that a good portion of your leads and customers work in the nonprofit sector, you could create an industry-specific guide on the benefits of adopting cloud-based HR software for nonprofits that talks to their specific pain points and resource considerations.
7. Segment customers by buying behaviour to identify patterns
Segmenting your customers by buying behavior is a great way to better understand their purchasing habits, their needs, and why they shop with you.
Different buying behaviors to look for include:
Typical purchase amount (e.g. buyers who never spend more than $50 on any product)
Purchase frequency (e.g. buyers who make a purchase at least once a month)
Seasonal buyers (e.g. buyers who only buy products during the holiday season)
Benefit/promotional seekers (e.g. buyers who only make a purchase when there’s an offer available)
By looking at buying behaviors, you can identify and capitalize on changes in patterns. For example, if you know that a customer usually purchases from your store regularly, but over the last few months they have dropped off the radar, you may choose to re-engage them using a win-back email campaign.
Or, say you know that a customer who usually doesn’t spend more than $50 on a product is now spending a lot more, you could target them with products that are in a higher price bracket.
8. Segment based on psychographic data
Psychographic data can tell us a lot about our customers, and using it correctly can do wonders for engagement. By surveying your users you can uncover psychographic information to understand things like:
How customers perceive your products and services
How to better communicate with your target audience
What customers want – and why
Customers’ biggest challenges
Customers’ attitudes, motivations and values
For example, a mindfulness SaaS app may segment its audience based on OCEAN: a model that describes five aspects of a personality:
Neuroticism / Emotional Stability
Using what they know about their customers’ personalities, they can design messaging and build customer journeys that speak to those characteristics.
9. Segment by stages in the buying journey
Segment customers by what stage of the buying journey they are at to effectively guide them down the sales funnel.
Those at the top of the funnel (prospects) should receive content that enhances brand awareness, such as blog posts, podcasts, social media posts, etc.
Middle of the funnel leads are at the evaluation stage and want to see how your product and/or service fixes their problem. Therefore, you should send them educational resources, webinar/event invites, surveys/quizzes, free trials/discounts/offers, etc.
The bottom of the funnel leads are close to converting. Send them content that will help them to make an informed purchasing decision: testimonials, case studies, demos, product comparison pages, etc.
10. Segment based on customer needs
Increase CLV and MRR by dividing users into groups based on their highest priority need (i.e. the problem they are most intent on solving). Note that segmenting based on needs alone won’t make it easy to identify and target relevant users. Instead, use descriptive data such as demographic and firmographic data on top of needs-based data to build lists.
For example, a meal kit service may segment its audience based on users whose biggest need is for mealtimes to be quicker. Once they have identified those users, the company may segment based on demographic data such as age, marital status, dependents, and income. Depending on the patterns that emerge from that data, they could target time-poor parents with marketing that highlights how their offering is quick, convenient, and perfect for families.
Beauty brand Function of Beauty asks users to complete quizzes in order to create beauty products that are highly personalized to them. These quizzes are amazing for segmentation because the brand learns exactly what the customer needs.
Once a known user completes the quiz, the brand can send content that is specific to them. For example, a customer may specify that their main hair concern is dryness. The brand can then send that customer content that is specific to managing dry hair, including customer testimonials from customers with a similar hair type. If down the track, the brand is releasing a new product for dry hair, they can send the customer a sample of that product ahead of its release to drum up excitement.
Segmenting your audience to speak directly to a certain group of people is a sure-fire way to scale your business. Your communications will be richer and more impactful, your customers will be more engaged and loyal, and your opportunities to grow will be abundant.
Intelligent audience segmentation is easy as pie in Ortto. Sign up for free and give it a go.