Whether due to lack of knowledge, time, budget or planning, many companies fall short of the mark when it comes to targeting the right audience.
It is essential that business owners, marketers or the person driving a direct marketing campaign know exactly how to define, segment and target prospects in order to maximise ROI.
Today, many businesses realise the importance of segmentation - the process of subdividing customers and prospects according to common attributes and characteristics relevant to a product or service.
With tools like Facebook, MySpace, YouTube and other social networking platforms, segmentation has become the most valuable and lucrative industry in the world - all with good reason. Collating information on a market segment that is valuable to marketers and alike - is priceless!
A segment is a part of the market consisting of a group of customers or prospects which is homogeneous to itself, has a similar need and which can be addressed in the same way, using the same strategy and distribution channel.
It is also very much about identifying which product or service a customer or prospect is likely to buy and exactly how best to communicate with them.
Many companies still treat all customers and prospects the same.
Know how big your segments are, what the size of the market is and ascertain what opportunities exist for your company in each channel.
Importantly, put your resources where it is most needed.
"The realism is that getting information to segment in depth is a challenge," said Marketing Eye, CEO, Mellissah Smith.
"The difference between b2b and b2c is very complex."
4 Steps to segmentation
1. Clean data: Data must be clean, current and comprehensive in a universal format. Create one master file by merging information from different areas to enable you to assess the state of the market and create a cusotmer-centric view.
2. Identify variables: Segments can be compiled by using a multitude of factors like geographic location, purchasing behaviour, business size, type etc.
3. Divide and Analyse: Determine what each company needs and divide it into segments of businesses with similar profiles then enlist a data specialist to conduct a statistical analysis. This will help identify trends and determine important charactistics of each segment.
4. Apply: Match the segments against your business objectives and use the segmentation as an ongoing part of your marketing strategy ensuring you have the market intelligence to fine tune your database and turn customer information into your competitive advantage.
ROI is very important when it comes to delivering direct marketing campaigns and market segmentation will not only help you deliver a more targeted campaign to your audience, but also work in your favour to achieve sales outcomes and a higher return on investment for your marketing dollar.
www.marketingeye.com.au
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2 comments:
'Segmentation' or ‘target marketing’ through a strong database of potential and existing customers is indeed a very good approach for companies to follow to drive their marketing activities in the right direction. Although many companies are increasingly implementing target marketing strategies and a more customer centric approach towards marketing, they might quite often not get down to the root level of target marketing i.e. creating a database of existing and potential customers based on multiple relevant factors such as lifestyle, demographics etc for B2C customers. For B2B customers it would be more about the type of business, industry, the growth of that industry etc. There is an immense difference between these two groups and most importantly marketing companies need to understand this more than anyone else.
Using new tools and techniques with advances in customisation technologies while creating databases of existing and potential customers would take target marketing to a whole new level. This could also be termed as ‘narrow branding’ the greatest advantage of which would be creating ‘brand personalization’ for customers through deeper connections with narrower groups of highly engaged customers.
From a marketing company’s perspective it would mean taking that well segmented database the creation of which Mellissah has explained here in a very detailed manner and then understanding the industry of a potential customer, their customers, what the company wants to achieve and how. This would more precisely mean reimagining every aspect of the brand—the brand experience, product mix, usability, distribution, content and media and providing customised solutions for each relevant consumer segment. Target marketing or narrow branding through efficient database management would definitely take customer engagement to the next level to achieve the desired results. Marketing companies need to definitely take this approach and I think Marketing Eye is definitely is doing a great job with 'narrow branding'
One company which gave the best example of using customer databases and details to their advantage was Apple. Using their customer database, they have been able to offer highly personalised products. Most of the marketing people have said that Apple's success can be attributed towards their excellent handling of their customer database and making great use of that.
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