Why Segmentation is Important for Marketing Campaigns

Segmentation

Long before the advent of sophisticated adverts and marketing strategies, businesses were known to focus on the one-size-fits-all strategy concerning marketing. There were TV commercials, radio ads, and billboards as the only reliable channels to market a specific product or service. However, a majority of these campaigns showed mixed results as marketers weren’t correctly able to identify their target audience. The mentioned marketing strategies were mostly generic but required lesser efforts and no expertise regarding customer segmentation.

Segmentation Empowers!

Every individual has a specific set of preferences, and he or she wants to see products and services that are aligned to the same. Marketing campaigns, therefore, should follow a creative yet selective approach where they are targeted towards prospective customers who are most likely to engage. For marketers, customer segmentation is all about personalizing the marketing and sales strategies depending on the audiences that share a similar set of preferences and attributes. This approach increases the cumulative uplift and impact of the marketing campaigns.Companies segmenting campaigns noticed a 760% growth in the Email Revenue! Click To Tweet

Segmentation starts with the identification of interest group/groups and eventually the creation of a target group by filtering the interest group, further. This approach would help marketers communicate and interact better with the granular audience base.

Furthermore, customers can be segmented based on the product distinction as compared to other segments, homogeneity or focus on similar needs, or reaction to specific marketing tactics. The basis of customer segmentation helps marketers personalize and design campaigns better.

Market SegmentationImportance of Customer Segmentation

Although mass marketing techniques using broader interactive strokes haven’t ceased to exist with commercial running and billboards still visible across highways, segmented marketing has readily picked up the pace with marketers using a diverse set of tools to leverage the myriad benefits of the same.

Moreover, segmentation allows businesses to increase their ROI and eventually, the bottom-line. Customer segmentation based on select segregating metrics helps companies identify the potential of their various marketing campaigns. With personalized campaigns, it becomes easier to save resources and increase efficiency.

A study by Harvard Business reveals that almost 85 percent of product launches in the US fail to generate positive responses and revenue due to unsegmented marketing. On the other hand, companies segmenting campaigns noticed a 760 percent growth in the email revenue.

Customer SegmentationThe four main reasons why businesses must align all marketing campaigns along the segmented route:
  • It helps market expansion and increasing competitiveness.

Once businesses create a specific subset concerning prospects, they automatically increase the market competitiveness and get a more significant market share. They can eventually develop strategies and campaigns to focus on surpassing the immediate segment competitors and not letting the broader entrepreneurial arena bother the advancements.

  • Improves Efficiency

Extremely targeted campaigns work like charm and help businesses allocate resources better. Segmented groups are smaller and therefore companies can plan out the size and financial spread of the concerned marketing campaigns with precision. The results and uplift are better with more targeted groups which overall leads to improved efficiency.

  • Better Customer Retention

Customer segmentation is a dynamic process where businesses understand the clients better, including their buying behavior and other activities. This aspect allows companies to retain the subscribers and clients by continually improving the quality of products, featured across diverse campaigns.

  • Makes Better Use of CRM

CRM is an organizational staple. However, for it to work at its best, business requires insights regarding the smaller target groups via market segmentation. Once smaller, homogenous groups are identified, targeting them with multiple smaller campaigns becomes easier, courtesy of better database management and CRM-induced promotions.

CRM and Customer Segmentation: The Role of Granularity

Credible CRM software allows marketers to segment better. This aspect involves analyzing customer interaction patterns by pooling data in one place. With trends and activities visible identified, it becomes easier to segregate prospects based on geographic, demographic, behavioral, and psychographic factors.

Customer Relationship Management Software integrates data from diverse sources, presents the processed data in a simplified layout, and allows businesses to select the particular customer segmentation criteria for segregating better. CRM also brings in predictive models and analytics to determine the CLV. This metric focuses on the value of customer associations, depending on their buying habits, product usage pattern, and more.

CRM is the perfect tool to streamline the process of segmentation. These marketing tools, in unison, can send out the right message to the right set of individuals and that too at the right time— eventually leading to increased bottom-line and significant sales uplift.

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