In the vast majority of companies with a customer database there will be some sort of segmentation in place. Offline acquisition strategies will be driven by targeting the desired segment and costs of campaigns will be calculated around the value of those segments. So why isn’t the offline model replicated online? There are three reasons why:
- Digital marketers have not had to be concerned with targeting because the migration of the population online has meant low acquisition costs and easily achieved volumes but this can create a new set of problems around product offering and customer communications.
- Targeting is more difficult. In a piece of direct mail you can target a postcode that matches your segment and remove existing customers. Online, prospects and existing customers will both see your campaign.
- The link to the customer database is not always in place. For example, a search bid management tool will optimise to a sale or a lead but will not know if that was from the targeted segment. Indeed it’s likely that the bid management tool will not recognise prospect from customer.
So why should the digital marketer use segmentation to inform their acquisition strategy?
Firstly, year on year growth is now slowing down online. The low hanging fruit has well and truly been picked! Secondly recruiting the right customer segment will increase profitability and enable a multi-channel strategy approach if the online and offline channels adopt the same acquisition strategy.
So how does the digital marketer implement segmentation into their acquisition strategy? Here are our 10 steps for using segmentation for online acquisition:
- Build the link from your online acquisition channels into your customer database. Ideally this will be through an API so campaigns can be managed and optimised real time
- Ensure the acquisition source is flagged in the database so you know which segments are being driven by the channel
- Use an online intelligence tool to identify which sites and keywords your targeted segments are using and put these in your campaign
- Make sure all creative including keyword copy is aimed at the desired segments
- Use targeted display advertising which can now be linked to postcode to drive the desired customer segment
- Ensure a true multi-channel campaign by linking and measuring the online and offline campaigns together
- Drive your desired segments through the affiliate channel by rewarding affiliates based on your segmentation
- Segment the affiliates themselves so you can have different communication strategies with them and again concentrate on the ones driving your desired segments
- Use website personalisation to appeal to your different segments and improve conversion
- Always ensure you use a robust test and learn methodology
Optimising your online channels using segmentation from your customer database will drive profit and gain competitor advantage as this rather obvious strategy is still not the norm online. As more of the digital technology, web analytics and attribution data get exported in to the customer database, segmentation will be necessary to make sense of all the data and drive the personalisation customers now expect from their online customer journey.