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With today’s technological advancements, businesses have access to many information holders, such as data for marketing segmentation. By analyzing segmented data where customers are divided into smaller groups, businesses can create more effective marketing campaigns and increase their sales.

What is Data Segmentation?

Every brand’s customer is different, and even though they are all interstate in the same product or service, they definitely require a different marketing approach. With vast numbers of customers, it can get unrealistic to create an individual campaign for each, that is where data segmentation enters the picture.

Data segmentation is the process where data about individuals is divided into data groups, based on relevant segments, life choices, locations, interests, and many other parameters. 80% of the companies that have implemented such an approach have seen an increase in sales.

The Main Effects of Market Segmentation on Your Business

Using data in business has become an essential process, but as technologies expand new kinds of data arise, such as segmented data. Here are the main positive effects of market segmentation:

Boosted opportunities. With a large customer base, it can be tough to identify new campaign ideas that will fit all prospects. Whereas when the segmented customer base becomes smaller, there are more opportunities for various campaigns and marketing approaches.
Targeted communications. Targeted and segmented emails bring in 58% of all revenue. An email sent to all customers won’t interest them all, however, emails sent individually to each segment have higher chances of being interesting for that specific group of customers.
Increased revenue. The goal of any customer communications is to sell a product or service, which will bring revenue to the company. By understanding what the customer wants paired with targeted communication, businesses can increase their revenue flow by making more sales.

How Do Marketers Use the Data Approach to Drive Success?

Customer segmentation is a critical component to maximize any business’s marketing efforts. Here is how data can help you improve the success of your marketing campaigns:

Develop Personalized Experiences

Creating an individual approach for all your customers is the ideal solution, but when the customer base grows, that becomes impossible and truly not worth it.

Depending on the business’s specialty, markets can use segmented databases, such as segmented by location or hair type. It is important that they then create campaigns specific for that segmented group, for example, separate campaigns for each state or campaigns depending on hair structure/color.

Generate More Leads

The ultimate goal is to catch your audience’s attention, but a general email send has a small chance of working. So based on your customer’s behaviour and traits you can segment which visitors prefer long articles over short ones.

Then use this information when sending out email newsletters. Even research shows that segmented campaigns had 14.31% higher open rates and saw 101% more clicks than non-segmented campaigns.

Learn More About Your Business

Many businesses find out a lot of new information about their business when they look into segmented data, so much so that they will start to refine their whole strategy. For example, you can analyze data and find that the most profitable customers of yours only make up a small segmented group that you never really targeted. With such data, markets can refine their focus on prospects that fall in that segment group.

Find Unique Ways to Connect with Customers

Customers are segmented into a group where placed because of a trait or similarity they share, if you take a look deeper, you can find that they share other similar traits and interests. Use information about those interests and traits when creating new products and target campaigns. That will bring their attention since they will see that you are mentioning something new and interesting to them.

How to Organize Consumer Behavior Data for Better Segmentation?

Data segmentation is usually tailored to specific company needs, but there are a few approaches companies use to fundamentally segment their data:

Demographic segmentation. In demographic segmentation, the overall customer base gets separated into small groups based on their age, gender, and location. This information isn’t enough for a good approach but is important to understand who you are working with.
Sales percentage segmentation. Sales percentages are the best way to identify your most loyal customers. If data shows that the customers show great responses to campaigns, the team can spend more time sending out promotions to such customers.
RFM Segmentation. RFM is a step higher to sales percentage segmentation, whereas it segments customers not only by the amounts they spend but also by how frequently they do so.
Occasion-based segmentation. Depending on your company’s products, a popular segmentation approach is by occasion. You can divide customers by interest in certain holidays, special events, or seasonal trends.
Benefit-based segmentation. When writing an email you often want to focus on a certain benefit, you can do that with benefit-based segmentation. The approach shows which customers are seeking what benefits and results from a product or service.