A MARKETING GEEK’S GUIDE TO:

SEGMENTATION AND TARGETING

A MARKETING GEEK’S GUIDE 2

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A MARKETING GEEK’S GUIDE TO SEGMENTATION AND TARGETINGGetting segmentation and targeting right takes a robust set of skills and tools. We’ve packed our best content about segmentation and targeting into this quick-read eBook. Even if you’re a well-versed marketer, consider this a refresher course. If you’re a novice, this is the eBook for you—by the time you’re done, you’ll be a seasoned pro! Let’s see what our experts have to say.

CHAPTER 1: AUDIENCE SEGMENTATION STRATEGIES AND BEST PRACTICES

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Audience segmentation is one of the cornerstones of effective demand generation. It helps in the quest to deliver personalized and relevant experiences that engage prospects as well as customers. Segmentation practices have evolved in more recent years thanks to the explosion of digital technologies that effectively bring data sources together to create unified profiles and perform more robust modeling.

The role audience segmentation plays has also changed. It impacts all channels and crosses many parts of the organization. For this reason, it is important to think through the best segmentation approach for the business, not just for a department or a particular project. By unifying audience segmentation and aligning strategy to key business objectives, organizations create a common framework for sales, marketing, product, and customer success.

Like many other aspects of marketing, audience segmentation strategies follow a maturity curve and have several key dependencies. Data and technology integration is critical to the success of segmentation. Siloed and outdated information holds organizations back due to a lack of quality, timely and actionable data. In addition, poor customer insights and marketing immaturity can also impede progress for segmentation. This is why persona development and journey mapping have become valuable tools for many organizations.

Predictive modeling is often grouped into the segmentation conversation due to machine learning and the ability to bring first and third-party data together. This is a powerful combination for organizations, and for many it goes hand in hand, but typically segmentation comes first.

Curious about types of segmentation other organizations use? Here is a quick overview of the typical approaches:

• Demographic/Firmographic: traditionally the most common approach to segmentation due to the relative ease of collecting or appended the necessary

data. Audience segmentation is based on the profile information known about the customer or the business they are part of. Campaigns and content can be tailored to a specific industry, company size or geography for example.

• Persona or need-based: in this approach audience insights are used to help differentiate key groups of customers or prospects. By understanding the motivating factors of each segment, campaigns can become more personalized and the specific needs of the audience can be addressed. This is becoming more important for organizations who deal with large buying committees and have multiple stakeholders involved in the buying cycle.

• Lifecycle: much like persona or needs based segmentation, this approach helps differentiate the audience based on their relationship with the business. New prospects will require different content and campaigns compared to existing customers. Also, inactive customers or inactive prospects should be differentiated further.

• Tiered: with the rise of Account Based Marketing this approach has gained in popularity over the last few years. Segments are created based on the value or importance of particular groups of customers to the business, much like the RFM (recency, frequency, monetary) models of the past. Campaigns and content can be developed to target very specific audiences and allow teams to prioritize resources accordingly.

What is the right approach for your organization? Should you combine different strategies? Working out what makes a useful segment and where to focus your attention is key. Consider these questions to help inform your decision:

• How relevant is this segment – can you meet its wants/needs?

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• How distinctive is it – do these individuals have characteristics sufficiently different from other segments?

• How big is this segment – is it large enough to make it worth targeting?

• How easy is it to communicate directly with this segment?

• Do you have the data necessary to support the segment?

If you decide to take a new approach to your audience segmentation strategy, don’t forget to test it to determine if it is delivering value. Measuring the lift in engagement, conversion, and revenue are all important to understand what the right approach for the business is. Analyzing data from multiple sources will also be key. Web analytics, campaign performance and social engagement will be early indicators, but sales and customer support information is also valuable.

Optimizing your audience segmentation strategy can provide many benefits to your demand generation efforts.

CHAPTER 2: THE STAGES OF MARKETING PERSONALIZATION

In today’s world, marketers are tasked with creating personalized experiences for customers and delivering those experiences in real-time. The idea is simple but the mechanics of execution are complex. It’s important to train your team on communication etiquette when interacting with a customer directly. It’s even more important to identify, track, and interact with an individual customer, and reconsider your messaging and campaigns to meet that customer’s needs.

It requires quality data, defined and refined processes, sophisticated tools, organizational alignment, and a lot of hard work. We often see teams invest in expensive technology with the hopes that it will magically produce the experiences they’re looking for, only to find out that technology alone is not enough. There is a progression that needs to take place in order to achieve the ideal state of real-time 1:1 marketing—a “ journey,” shall we say, that takes us through the various stages of marketing maturity.

The first stop on your journey in being able to execute 1:1 marketing campaigns to the masses, is evaluating what your current personalization maturity level is. Once you know where you stand today, you can begin to work your way up into more advanced and sophisticated phases. To help you get started, we’ve put together stages. Read through them and see where you land today, and identify the areas you can improve in order to achieve 1:1 marketing in an automated fashion in real-time.

MATURITY STAGESGENERIC MARKETING – 0Also known as the “Batch and Blast” stage, the Generic Marketing stage is characterized by mass marketing communications and non-segmented outreach. It’s a one-size fits all approach, which unfortunately often falls flat. Due to the lack of targeting, the message is general and

fails to resonate with the audience. At best, engagement rates will be low. At the worst, spam complaints and bad reviews will taint your brand.

If you find yourself in this category, the first step is to segment your audience and adjust your messaging accordingly. Here are a few questions you can ask yourself: What are the primary, big bucket groups within your audiences? Is there a reason you cannot segment according to these groupings? If so, what’s the reason? Are you lacking data, resources, technology? Answers to these questions will get you started and on your way to the next stage in maturity—Demographic Segmentation.

DEMOGRAPHIC SEGMENTATION – 1In this stage, we see marketing begin to customize outreach based on demographic data points they’ve collected for their audience. The market is divided into smaller categories based on demographic factors, such as location, industry, or job role. Instead of reaching an entire database, marketers focus messaging to a defined group and create messaging tailored to that unique audience as a whole.

If you already have your segmentations defined, and are personalizing your marketing campaigns based on demographics, we encourage you to ask yourself if you can further segment your audience by behavior. For example, once a contact has been included in a marketing campaign, is their “ journey” already written and predetermined? Does it look the same as everyone else? The majority of a buyer’s journey is now done independently, which means marketers need to listen for these activities and pivot campaigns based on the behaviors of each individual. Start by defining key activities your audience takes throughout the buyer’s journey and set up processes to listen for and capture these behaviors. This will get you on the right track to the next stage—Behavioral Marketing.

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BEHAVIORAL – 2Behavioral marketing is when marketing targets audiences based on their behavior, interests, or intentions in addition to demographics. By further segmenting audiences based on specific behaviors, we begin to create more relevant content and offers rather than sending a general message to all audiences. Behavioral marketing is more complex and requires that we have the technology and processes in place to listen for, capture, process and store different types of online and offline activities in order to segment and target audiences. To take it a step further, marketers often engage with third parties such a 6Sense or Bombora which have built powerful algorithms that take these behaviors, evaluate them, and assign interest or intention data points which can be used for further segmentation. Another opportunity is to utilize a tool such as Oracle Infinity, which not only collects behavioral data, but also turns it into predictive intelligence that you can use in real-time to enhance engagement.

If you have a marketing automation platform in place, and have connected it to your other major technologies such as your website, CRM, webinar platform, etc., then you are hopefully already doing some form of behavioral marketing. As we move to the next stage, we need to have our technology, processes, and strategy align so we can begin to personalize the experiences to the individual, and do so at scale. To start this transition, I recommend to outline the ideal journey for one individual. Make note of all the elements that are unique and personal to that individual. Now go through and see where your gaps in data and technology are stopping you from executing the campaign, and automating the personalization—and focus on closing those gaps.

1:1 MARKETING – 3In this stage of personalization, each experience is unique—no journey is the same. With accurate demographic and behavioral customer data, you can begin to personalize your marketing to each individual. As mentioned earlier, the idea is simple, but it’s impossible to manually create and deliver a personalized experience to every single contact—there’s just not enough time and resources. But with the right technology and processes in place, we can approximate the 1:1 experience at scale. Starbucks does this very well. They’ve created a mobile app experience that is personalized to each customer with your favorite items and

most recent purchases clearly displayed. This makes repeat orders easy. It also offers rewards and challenges that are personalized to each customer and based on the user’s past behaviors.

If you’ve already started to run 1:1 marketing campaigns, take a moment to give yourself a high five—this is no easy accomplishment! Then pause and reflect to see how you can continually improve them. Can you further personalize? Can you collect key data points earlier in the journey? How quickly do your systems all speak to each other, and can you cut down any lag time to approach real-time segmentation and messaging?

REAL TIME – 4The final stage of Real-Time marketing is taking everything we have learned in the previous stages, and applying it to real-time segmented groups based on their digital behavior, funnel stage, or engagement with content. It’s about creating relevant messaging by listening to and anticipating customer needs. Each person has a unique way of discovering their needs, evaluating and making purchasing decisions. In the 1:1 marketing phase we learn to listen to these differences and adjust our response. However, each person’s journey is also dynamic, and always changing—not to mention influenced by outside forces. For example, when the power went out and delayed the game during the 2013 Super Bowl, marketers had been anticipating all eyes would be on the screen, but as living room spectators waited for the game to resume, many turned to social media to pass time. Oreo quickly pivoted and tweeted their now famous ad “you can still dunk in the dark” capturing an audience’s attention with relevant and real-time messaging. This shows that we not only need to anticipate customer needs, but we also need to learn how to pivot our marketing real-time in response to a shift. Some of this can be automated by setting up methods to listen to digital behavior, but sometimes the unexpected occurs and need to learn to be flexible and know when to pivot.

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CHAPTER 3: DON’T MAKE YOUR AUDIENCE THINK YOU’RE CRAZY

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Dream, if you can, a courtyard filled with people. Some are shopping, others are seated and eating, while others are walking by or are just sitting in the grass because there was space. Everyone is minding their own business and are focused on what they are doing. Out of nowhere, you walk into the middle of the area and from the top of your lungs, you announce:

“ALL SPATULAS ARE 20 PERCENT OFF! TODAY ONLY!”

Totally normal. I mean, who doesn’t love a good deal on a new spatula?

No, that would be weird – really weird.

Most people in the area probably wouldn’t even really notice, and if they did, they’d just ignore you. Many of the people would have no idea of who you are. Those that paid some attention would probably wonder why you’re yelling and who you are even trying to talk to. Surely you weren’t talking to them – they were just sitting there not thinking about buying spatulas.

No one responds to your announcement. Most people are actively looking away from you.

Frustrated and disappointed by the lack of response, you take a deep breath and try again.

“ALL SPATULAS ARE 20 PERCENT OFF! TODAY ONLY!”

“Stop yelling”, shouts someone from the grass.

“Who cares?” Yells another.

Dejected, you start walking around to some of the people that had made eye contact with you when you were making the announcement. They looked at you at least once, so that must mean they need a spatula! You walk up to each of them to tell them about the amazing spatula offer.

You receive a lot of the same responses or lack thereof. You

are determined however and keep approaching anyone who made eye contact. You’re so focused on following up with these people that you don’t notice there is a person on the other side of the courtyard who quietly asks.

“Where can I buy one?”

You keep approaching people to tell them about this “once-in-a-lifetime” deal. No one is buying a spatula, but you keep going. In the meantime, that one person that asked the question is starting to follow you without your noticing.

Eventually, you complete your objective of following up with everyone in the courtyard and you walk off into the sunset.

The one person following you is left standing in the courtyard.

Everyone left in the courtyard continues on with what they are doing, never giving you a second thought, having written you off as “just some crazy person shouting in the courtyard”.

No spatulas are sold.

DON’T BE CRAZY!In 2004, tools and technologies were limited, so marketers did their best with what they had. We were still in the age of ‘database marketing.’ Batch and blast emails were the only realistic approach.

When it was time to put out a message, you created an email and sent it to “the list.” It worked, but not great, and we were happy with 10% open rates and 2% click through rates. It was expected that up to 90% of your audience wouldn’t even see your message.

We were just walking into the courtyard and shouting about spatulas. We just didn’t realize it yet.

FAST FORWARDThe marketing technology ecosphere has exploded with nearly 8,000 tools to help marketers reach the right people,

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at the right time, with the right message. There is no reason to be a crazy person shouting in the courtyard.

As a marketer, when you have a message to share don’t just go for “the list.” You should talk to the people that have indicated they want to talk with you. Have they opted-in and said they want to hear from you, or are they from some list you found (or worse, bought)?

Of those people that want to talk to you, you should prioritize those that have a category interest that would include what you’re talking about. This may require some extra work. Do your forms ask the right questions so you can have this information? Does your CRM tell you the type of past purchases or industry they are in?

Lastly, you should prioritize those people that have recently told you these things. Can you tell when they last visited your website and which pages they visited? Does your email platform identify when an email link is clicked?

Take the time to identify the needs and drivers of your audience. From there, you should analyze your marketing efforts and tools to identify how you can message your audience in real-time, or as close to real-time as possible. Don’t scream about spatulas. Find the true chefs in the park, specifically the ones that need a new spatula, and offer them the information they need to make an informed decision about yours.

The right people, with the right message, at the right time. The tools, technologies and methodologies are up to you.

CHAPTER 4: AUDIENCE SEGMENTATION & TARGETING: LISTEN – DON’T ASK

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One of the most common challenges for any marketer is to identify and collect the right information to segment and target their audience. With good segmentation and targeting, marketers are able to attain the holy grail of “the right message, at the right time, to the right audience.” Doing this well sets a foundation of success for any marketing campaign. If the audience isn’t right, then the content won’t drive engagement and conversion. What’s even worse is that by segmenting and targeting poorly, you may cause your audience to question if they want to listen to your future messages and if they even want to receive them at all.

In trying to solve this challenge, it is not uncommon to want customers and prospects to tell you what they are interested in. This may progress to need more and more information and hope your audience will provide it.

• Surveys…

• Preference Centers…

• Event Registrations…

• The list goes on….

• As the marketing team brainstorms, your list of desired questions continues to grow…

• Demographics…

• Firmographics…

• Geographic…

• Preferences…

• Interests…

• Sub-interests…

• Sub-sub-interests…

• We-don’t-even-know-how-to-categorize-it-but-we-still-want-more…

• And so on…

By the end of the discussion, there’s a list of dozens of desired pieces of information to collect. There are even more ideas around how to manage the user experience to ensure that the audience will not experience ‘form fatigue,’ and that the organization will have all the answers they want.

Does this sound familiar?

While on the surface, there is nothing wrong with this approach, but take a step back and consider your personal experience with some big name brands.

DOING IT RIGHTHas Google ever sent you a survey regarding the ads it should display?

Have you ever needed to tell Amazon what types of products you are interested in?

Probably not.

The problem with asking is that it puts the responsibility and effort on the backs of your audience. Not only does this put the work on your audience, but it may also prevent you from gathering the desired information. Consider your average response rates and think about how many people will not respond at all..

By asking, it also tells your audience something else – that you aren’t listening.

Think back to your experiences with Google or Amazon. How do they know what you are interested in?

It’s easy – you told them, they listened. Every tracked action tells something about your audience.

• Opening and clicking emails…

• Visiting web pages…

• Clicking ads….

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• Downloading white papers…

• Searches on your site…

• Shopping cart activity…

Behaviors and actions are more informative than any information your audience will voluntarily provide.

“But this sounds like a lot of work!”

This is one of the reasons why Google, Amazon and the like are the ‘big players.’ They did the work instead of asking their audience to do it for them. They listened to what their audience was already saying through their behavior and actions and then used that information to make it easy for their audience to be customers.

BRINGING IT BACK TO YOUR BUSINESS‘Sure’, you may say, ‘it’s easy for Amazon or Google to do this’, but what about our business?

To do this well requires commitment to the strategy and then follow through to categorize and classify every trackable asset and interaction so that you can create a profile for every individual in your audience and across all platforms and channels. Just like at the start of this article, marketing will need to determine ‘what’ the information is that you need to know. From there, use your existing marketing tools to assign tags and labels to your content so that your audience can also be tagged and labeled when they interact with your content.

With each interaction, your audience will tell you more and more about their interests.

Are you listening yet?

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WRAPPING THINGS UP

Do you hear that? It’s the sound of champagne popping and confetti falling to the floor because you’re one step closer to audience segmentation and targeting excellence! So, start practicing and putting your new knowledge to work. It’s been our pleasure to guide you. If you’re working on developing personas, or your segmentation needs a little boost, please contact us. We love helping companies make the most of their marketing skills and tools!