Sharpen Targeting with Micro-Segmentation to Achieve Higher Response and Conversion

micro segmentation marketing

Most often several marketers complain that their audience is miniscule or they don’t have a sufficient mass customer base to justify targeting. The idea of targeting your campaigns at a subset of a small audience may seem counter-intuitive to many, but it works.

In fact it is such hyper-targeted marketing and hyper-personalized campaigns that do the trick to fetch you greater response rates than a mass marketing approach. When you divide customers into smaller groups based on their needs and actions, you are better positioned to address their pain points and in turn sell more of your products and services.

The Importance of Segmentation to get a Well-Defined Audience View

A one size fits all approach no longer works; sharpening segments helps to cluster your customers into groups that share the same properties or behavioural attributes. This in turn helps to drive dynamic content and personalization tactics for timely, relevant and effective marketing communication.

A Harvard Business study states that out of 30,000 new product launches in the US, 85% fail due to ineffective market segmentation strategies.

Conversely, marketers have witnessed a whopping 760% increase in email revenue by running sharp segmented campaigns.

Sharp Segmentation Elicits Greater Response

Segmentation exists to serve a significant purpose: maximize response. Through customer segmentation and targeted marketing campaigns, companies can reduce the risk of marketing to uninterested consumers and increase focus on a specific subset of prospects.

Here’s how segmentation can help you achieve good response rates. You can:

  • Drive Relevance by Running Multiple Focused Campaigns
  • Prioritize Customer Segments Most Likely to Engage and Convert
  • Get a Strong Understanding of Customers which leads to Effective Communication and Improved Customer Relationship
  • Achieve Increased Competitiveness within the Particular Segment
  • Uncover Different Audience Segments to Expand and Use in the Future

Not only does a sharper segmentation strategy lead to better responses by launching multi-wave campaigns specifically designed for distinct groups, it also substantially increases ROI.

According to a survey done by Bain and Company, 81% of executives stated that segmentation was a critical tool for growing profits and organizations with great segmentation strategies scored a 10% higher profit.

Getting the Art of Segmentation Right

While the first step of segmentation is to understand your customers based on basic demographic attributes, it’s necessary to go a step further to identify how your customers interact with your business. As a result, you can use those behavioural customer insights to further sharpen customer segments into approachable groups and execute targeted campaigns to elicit higher response.

Segmentation should not just be seen as an activity that involves numbers and data. Rather it should involve analytics and creativity – a ‘whole-brain’ activity to arrive at the ideal customer segments for your business.

Besides the more you run segmented campaigns the better you get at it. The sharper the segments the higher the impact and response. So, keep trying and testing to see how much of a difference segmentation makes in your campaign response rates.

To sum up, segmentation should not be overlooked and marketers should definitely not abandon campaigns because the number of eligible customers is too small. Though it might not be possible to run personalized campaigns tailored to individual customers, by creating micro-segments you can get as close as possible and deliver personalized communication at scale.

Familiarize yourself with tools that can help you arrive at ideal segments and improve your campaign performance. Stay consistent with your efforts and we are sure you can reach your goals.

Have you tried applying segmentation techniques to launch targeted campaigns? If yes, what’s your experience been so far? If no, what’s stopping you? Drop your comments below.

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