Digital Segmentation – The How, Why and When of Dividing Your Audience

In the Age of Digital, audience segmentation is capable of going further than ever before, leading to a new era of custom and personalised digital marketing. Successful digital marketing companies are developing platforms and strategies, that enable brand leaders to reach their potential customers. By using a set of set of preferences, digital markets can customise and accelerated the buying process for each prospect.

Consumer profiles based upon digital interactions, are constantly tracking what you like, what you buy and how you buy it on an ongoing basis. However, this information is ineffective to a digital marketing agency, if it is not segmented and targeted for the appropriate audience. Digital Marketers must also now understand the behaviors and preferences of consumers, in order to influence their purchases.

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Market Segmentation

Segmentation is the process of dividing your database into groups based on a single or multiple criteria. Segmentation allows you to group your customers by similar characteristics, making marketing techniques easier and more efficient.

The main forms of market segmentation are:

Demographic segmentation: Segmenting your potential market from a ‘people’s perspective’. Age, gender, sexual orientation, and income are some ways of achieving demographic segmentation.

Geographic segmentation: Segmenting your potential market by where they are located. This can be as restricted as you see fit. For example, you could choose to segment the market based on their country or zip code.

Psychographic segmentation: Segmenting the market by customer personality traits, values, attitudes, interests, and lifestyles.

Value segmentation: Segmenting the market by the relevant ‘transactional worth’ of a customer. This means assessing previous transactional data to understand products purchased, how frequently the customer purchases and ultimately how profitable they are to your business.

Why segment?

The core goal of any marketing campaign or activity is to be relevant. As digital capabilities and online experiences continue to grow, customers have come to expect a seamless and consistent brand- to- consumer experience.

Segmentation allows you to be more relevant by understanding the core characteristics and behaviours of your customers. You are then able to deliver marketing messages which are likely to resonate with them. Increased relevance leads to higher conversion rates, and an advantage over your competitors

Brand-to-Consumer Experiences

Competitive digital marketing strategies necessitates analysing the next step a consumer may take. This kind of analysis can only be achieved through predictive market segmentation.

These insights put you ahead of the curve, allowing you to gain real-time understanding of where an individual is in the buying cycle, and how the brand can move them along the path to purchase. An understanding of your customers allows you to avoid pitching irrelevant marketing content, and to target your consumers at the right time in the buying cycle.

Creating an effective segment-driven strategy

Technological innovation continues to evolve the customers needs and preferences. Businesses are modernizing the way they target digital consumers, in order to maximize value in each segment.

Positioning: Even when you have gathered your customer profile, there are many steps to take before it is time to send a marketing message. The business must then decide how it will best serve the selected customers. This will include positioning itself in the market and differentiating itself from other competitors.

Targeting: The marketer must then determine which of the segments offer the best opportunities for the particular campaign. Digital campaigns can be incredibly costly for an emerging business, therefore it is best practice to only concentrate on, and enter those segments in which you generate the greatest customer value over time. After the company has chosen a desired position and targeted campaign, it can take the steps necessary to deliver and communicate that position to target customers.

With greater insights into customers behaviours through digital segmentation, marketers have the ability to create accurate forecasts and predictive modelling for their campaigns. The result is highly targeted and relevant campaigns, leading to higher conversions and greater customer satisfaction for your brand.

Bio: Laura Costello is a recent graduate of a Bachelor of Law/International Relations at Latrobe University. She is passionate about the law, the power of social media, and the ability to translate her knowledge of both common and complex topics to readers across a variety of mediums, in a way that is easy to understand.

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