Customer segmentation is the process of creating sub-groups of your shoppers based on their shared characteristics.
Given that 77% of ROI comes from targeted and triggered campaigns, customer segmentation has always been one of the core digital marketing tactics. Segmenting your customer base enhances your understanding of customers’ behaviors and thus personalizes promotional campaigns for each segment. This is of great value to your business because people tend to respond better when they feel that their needs and interests are being specifically addressed.
However, things do not always go with the plan. A small mistake can cost you a lot of time and resources to fix the whole segmentation process.
In this blog, we explain 5 common customer segmentation mistakes and how to address them wisely so as to make the most of your data.
1. Your segments aren’t in line with your business goals
It is important that any marketing campaign you launch serves the business goals effectively. Whether it is attracting new customers, expanding customer lifetime values, or introducing new products, your campaign must help you move towards it.
For example, a customer segment whose already-installed SaaS product can be integrated with your new app should receive content regarding how this workstream benefits their operation instead of a mere release announcement.
If you’re unclear about what your goals are, follow the SMART model and define them rightly.
Specific. The goal should have a clear, highly-specific endpoint. If your goal is too vague, it won’t be SMART.
Measurable. You need to be able to accurately track your progress, so you can judge when a goal will be met.
Attainable. The goal should be achievable and meet up with your motivation now and in the future.
Relevant. The goal you pick should be pertinent to your chosen field or should benefit you directly.
Timely. Setting a timeframe for your goal helps quantify it and keeps your focus on track.
2. You only rely on past behaviors
Although demographics and purchasing history are important to consider when creating a segmentation list, don’t get too caught up in the data. Furthermore, your audience’s habits are prone to change over time. Therefore, centering your strategy around the same behaviour while ignoring others is extremely restraining.
Instead, build a strategy that reflects on the values of your target customers and take a look at any upcoming trend. This way, you won’t waste your time tailoring your content in something that has been altered.
3. You define your groups too broadly
Customer segmentation mistakes may arise when you decide on your categories. If you define your groups too broadly, you might miss out on certain categories and lose your customers on competitors whose segmentation is narrower.
Narrow group definition enables you to create more relevant messages so as to get a better response rate. Because not all customers have the same demand, offers that touch people’s unique needs increase the chance that the customer is interested in your product, which leads to a greater chance for sales.
4. You don’t clean your data before segmentation
Most of the time data come in large volume and velocity. Data that is irrelevant to your marketing goals and business objectives will prevent you from accurate and well-streamlined segmentation.
Therefore, before categorizing your customers, remember to do a data audit with the help of a spreadsheet. You decide on which data field is needed and which is unnecessary for your campaign. You might also need more space for new fields and eliminate duplicate data. Once this is done, you’ll have clean data that makes your segmentation more effective.
5. You don’t have enough data
Segmentation is about identifying patterns in your data. The more data you have, the better it reflects your customer population and allows for a deep understanding of their behavior.
In case of technical errors where the data doesn’t reach your marketing team, install a workflow integration tool in advance. This platform will make sure data from your gathering system is connected to your data-processing system, such as customer relationship management (CRM) as soon as it is updated.
Check the whole stack and make sure valuable information doesn’t languish somewhere else.
Customer segmentation is not only about data. It’s about the effectiveness of data.
To eliminate unwanted customer segmentation mistakes, you need a fully-integrated tool that can automate the process for you. With the right platform, you can segment your audience every time needed and use automation to deliver the message. Eager to learn how this operates, take a look at our Ergo Automation for Shopify. Have a nice segmentation and grow your business!
Our products and services: Shopify automation, BigCommerce automation, Backorder management