It’s Never too Late to Become an Audience Segmentation Wizard

Digital Marketing / August 12, 2019

When you first start planning digital marketing campaigns, audience segmentation can seem like some kind of esoteric art. And in some ways it is. The good news is, smart people like you do segmentation every day — you can learn it — and then all your advertising campaigns will be considerably more effective. 

Audience segmentation is the process of dividing your audience — be the readers, customers, followers, leads or influencers — into distinct groups based on their demographics, behaviour or engagement level. For example, an audience segment may be something like “people who buy health food” while another segment could be “people who buy fast food”.

Once you’ve identified each group and determined the best ways for engaging them, you are positioned to craft campaigns and content that is targeted to their needs, interests and behaviour. It goes without saying that this process will result in better campaigns, and ultimately a higher return on investment.

How to Segment Your Customers

There is a methodology behind identifying and segmenting your prospective or current audiences and/or customers. You do this by using market data and research to hone in on the customer behaviours and other characteristics that clearly identify your customer and market segments. Each of your audience segments becomes a target audience that requires unique content and marketing tactics to solicit the desired response to your product or service.

Customer Segmentation

Who are your current customers? What kind of human is currently buying your products and services? It’s important to you begin the audience segmentation process by grouping your current customers by income, profession, geography, gender, etc. What are they looking for when they buy your product or service? What needs do you meet for them? And what is their purchasing behaviour?

Market Segmentation

Once you know who is buying from you, it’s time to identify who is not buying from you (but should be). Maybe you know that people are buying similar products and services from your competitors. Or maybe you’ve identified an unmet need for your products and services in the market. Take time to identify and group your prospective customers into similar audience segments, based on what they do, where they shop, where they get their information, where they live, etc.

Now ask yourself: how are these audience segments different?

Customer Behaviour

What are your potential customers doing on your website? What are they looking for and where are they going out there on the web? By tracking consumers’ patterns online, marketers create audience segments based on user behaviour. These segments are then applied to anticipate what members of an audience segment are likely to do. It then becomes easy to target specific audience segments with relevant advertisements, emails, content and even products to which they’re more likely to respond.

Consumer Market Data

A lot of what we know about our audience segments will be qualitative, based on interactions or observations about current and prospective customers. To get things right, always back up your in-the-field insights with quantitative information. Consumer market data such as comparative website traffic, market share data and social demographics will help you refine and deliver new insights. 

You can acquire great consumer data from paid research firms. But we know these are inaccessible for many small- and medium-sized businesses. Great free sources of consumer market data include Alexa, Think with Google, Google Trends, Google Ads Keyword Planner, and publicly available census data. 

Creating Your Target Audiences

All of this legwork —  market and customer segmentation, understanding customer behaviour and gathering market data — culminates in identifying your target audiences. The task here involves crafting personas. Based on what you discovered about your current and potential customers, come up with a description of an individual who personifies each segment. Where do they live? What do they do for work and for fun? Where do they hang out online, what do they read and how do they buy? Each persona will function as a representative of one of your target audiences.

While some of your target audiences may be actual customers, others may be followers or influencers that impact potential customers. Once you know who your current and potential customers are, it’s helpful to also look into where these audiences get their information. 

Combined, you should have a collection of personas that represent your target audiences: current customers, potential customers, and people who influence your current and potential customers.

Applying Audience Segments to Email Marketing

Once you have a really clear idea of what your audience segments are, you can start sending highly targeted emails to each of these individual segments. This allows you to craft email content and specific offers that align with the needs and interests of your various segments.

Creating Email Lists

It can be tricky to segment a pre-existing email marketing list. It all depends on what information you have previously gathered from your subscribers. You may be able to cross-reference your subscriber list with information in your customer database to build out more detailed customer profiles. It’s still worthwhile to further segment your email lists if you find that you can align these subscribers with newly-created audience segments. 

Capturing Emails

The fun part begins when you can build new email lists based on the audience segments that you have created. Your email marketing tool (like MailChimp or Hubspot) will allow you to create forms that can identify audience segments when people sign up to receive your emails. There’s an art to this: you need to come up with the minimum number of buttons to check or fields to fill in that can identify key interests or demographics that segment your subscribers. A/B testing and conversion rate optimization can be a good way to help you create effective and relevant forms.

More sophisticated e-commerce and email marketing platforms will merge behavioural targeting with email marketing, allowing you to use information about how visitors navigate your site to build targeted email lists. For example, you may want to group and target customers based on which products they viewed, or on information, they provide during the check-out process.

Creating Lookalike Email Marketing Segments

One of the most exciting developments in recent years is the ability to import your email marketing lists into Facebook or Google Ads and create lookalike audiences. For example, you can choose to import a list of returning customers into Facebook or Google Ads and the platform will build an audience list of people who share the same attributes as your returning customer list. If you know what works for your returning customers, you can then target this lookalike list with similar ad content and messaging. 

B2B and B2C: Different Worlds

A lot of the segmentation that we’ve referenced so far refers to business-to-consumer marketing (B2C). If your business is targeting other businesses, segmentation is still critical, but it’s a very different animal. The B2B sales cycle can be longer and more complex; it’s often about educating and building a longer-term relationship with customers. A lot of B2B marketing involves generating, nurturing and closing sales leads, a process that can take months and involve dozens of different customer touchpoints. 

Customer Lifecycle

While consumer demographics are useful in identifying and qualifying B2B prospects and leads, the real audience segmentation magic occurs during the B2B sales cycle. A B2B marketer will segment their prospective leads and customers based on where an individual is situated in the sales cycle: referral, contact, qualified lead, nurtured lead, offers and so on… This is a fluid state that sees leads move from one audience segment to the next based on their level of engagement with the sales team.

Using a CRM Tool for Audience Segmentation in B2B

In B2B marketing, a customer relationship management (CRM) tool will automate the process of segmenting audiences based on their place in a sometimes lengthy sales cycle. Once a prospect or lead moves from one phase to the next in the sales cycle, the CRM tool will automatically add them to the relevant segment in order to start targeting them with relevant advertising or content.

There are several CRM tools on the market. Hubspot is one of the best CRM out there for B2B companies. Our agency can help you launch your business on Hubspot and start your segmentation and inbound marketing strategy. 

Applying Audience Segmentation to Social Media

Social media takes audience segmentation to a whole new level. With so many users actively using social networks, declaring their interests and preferences in great detail, these tools allow makers to segment and target millions of different audiences and interests.

Social Signals

Tiny but powerful, social signals are all the micro-actions — likes, shares, votes, pins — enacted on social media content. Using social signals to create an audience is essentially gathering behavioural data to create audience groups. There are many tools on the market, such as Sprout Social and Sysomos, that enable marketers to identify new audience segments by grouping users based on similar social signal patterns. This can deliver groundbreaking insights into new consumer and cultural trends for brands to target.

Social Media Targeting

Anyone who has spent time inside Facebook’s advertising platform is aware of how powerful and granular social media targeting has become. Once you have identified your audience segments, advertising on social networks becomes a fascinating exercise in engagement and optimization. Not only can you very precisely target consumer audiences, you can create content that speaks directly to these audiences. This kind of micro-targeting is a very effective way to test the accuracy of your content strategy and audience segments.

The Better you Know Your Customers, the Better you Can Give Them What They’re Looking For

In an ideal universe, marketers understand their customers so well they create segments that respond intuitively to a customer’s needs and interests. We’ve all been targeted by great examples of audience segmentation — when it’s right, we may not even notice it’s happening. Most of us have been the targets of abysmal targeting too; when segmentation goes wrong, it can be very wrong. 

Digital marketing and advertising are only going to get more granular as companies develop technology that lets us go deeper into the needs and interests of our audiences. If you’re a marketer, now is the time to become an expert at audience segmentation. Done right, it will make your campaigns smarter, your ad creative better, and your customers happier.

If you want to learn more about segmentation, watch our free webinar “How to Use Segmentation to Have a Significant Impact on ROI”.