Segmentation strategies are critical to your marketing success

But so many organisations fail to properly understand who they are marketing to across the customer lifecycle. In this blog, we explore 6 top tips to implementing a successful segmentation project.

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Customer segmentation is a vital component of successful modern marketing strategies. It allows businesses to divide their customer base into groups that share similar characteristics, enabling them to tailor their marketing efforts and provide a more personalised experience. When done right, segmentation can drive revenue growth and enhance customer satisfaction.

So, what are the key factors to consider when developing your segmentation strategy?

1. Clear objectives and strategy

To ensure the success of a segmentation project, it is crucial to establish clear objectives and develop a well-defined strategy. By clearly defining the desired outcomes, such as increased sales or improved customer satisfaction, your business can align efforts accordingly. A robust strategy outlines the necessary steps to achieve these objectives and allows for effective measurement of success. Working with a data and insights partner can provide expert guidance in developing a segmentation strategy that aligns with your business goals, helping you navigate the path to success.

2. Pre-packaged or bespoke segmentation

The decision to opt for a pre-packaged or bespoke segmentation project depends on your specific needs and timescales. Pre-packaged solutions offer ready-to-use industry best-practice segmentation models (such as Mosaic or FSS) and are ideal when time is of the essence. Alternatively, bespoke projects are tailored to your unique requirements, allowing for more granular segmentation based on specific data points.

Bespoke solutions in geographical, attitudinal, behavioural and demographic contexts provide tailored insights into your customer base. This helps give a more in-depth understanding of your audience to make informed decisions, develop targeted strategies, and deliver more value to customers.

When deciding which approach you want to take, think about the required outcomes to decide which approach would be best suited to your needs.

3. High-quality and comprehensive data

Poor data quality or quantity is a common pitfall that can hamper segmentation projects. Reliable segmentation models rely on accurate, up-to-date, and comprehensive data to identify patterns and group customers effectively. Poor data quality, inaccuracies, or outdated information can compromise the reliability of the results. Similarly, working with too small a sample size can lack diversity and hinder campaign effectiveness.

4. Collaboration and stakeholder involvement

Stakeholders such as sales teams, customer service representatives, and marketing managers hold valuable insight into customer needs and preferences and their input is critical for success. It not only enhances the accuracy of the segmentation model but also ensures that it aligns with broader marketing and business objectives.

Collaboration and communication across stakeholders help build and maintain stronger and more effective campaigns.

5. Simplicity enhances effectiveness

Overcomplicating the segmentation model is a common mistake that can hinder project success. While it may be tempting to incorporate numerous variables, doing so can lead to confusion and inefficiency. Complex models are difficult to implement and maintain and may ultimately fail to accurately represent the diversity of the customer base.

Identifying the most valuable data points and variables for your strategy will allow you to build out a simpler but more effective plan.

6. Integration and follow-through for sustained impact

Finally, integration and follow-through are critical for achieving sustained impact. By actively incorporating the segmentation model into marketing activities, your business can unlock opportunities for growth, improve planning and resource allocation, strengthen customer relationships, and make informed location-based decisions. Embracing integration ensures that the benefits of segmentation are fully optimised, leading to positive outcomes and driving business success.

Many organisations are tripped up at this last stage, having invested heavily in analytics and potentially expensive research, they find there is no way to link back the segments that stakeholders have bought into marketing, CRM and location-based activities.

Although easier to solve for this at the inception of a segmentation project, Experian have worked with many organisations to operationalise their existing segmentations, so they are truly actionable.

Segmentation is a powerful tool for modern marketers, and by addressing the common challenges faced in segmentation projects, businesses can achieve better results and drive growth. The key is to approach segmentation with careful planning and execution.

How can we help?

If you’re looking to improve your segmentation efforts, partnering with a specialist like Experian can offer data, insight and analytics to support and strengthen your marketing campaigns.

We can provide expert guidance on segmentation strategy, helping you set clear objectives and develop a well-defined strategy that aligns with your business goals.

With our comprehensive data sets and data management expertise, we can ensure that you have access to high-quality and accurate data, addressing any data-related challenges you may face.

Get in touch

For advice on bespoke market segmentation, get in touch.

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