Any marketer worth their salt will know the value of segmentation and many will be practising it to some extent – but are you doing it properly?

A few weeks ago, I shared a discussion document, about the ability to predict demand curves across segments – and how it was beneficial to work with a greater number of smaller segments, to aid predictive ability.

But this is only half the point of Segmentation.  It’s all very clever to be able to decide which segments will and won’t reward the cost and effort of contacting them but that logic ignores one massive extra variable, which can change everything – the fact that you don’t have to say the same things to the whole list.

Having gone to some trouble to understand and divide up one’s customer base, it doesn’t exactly make a lot of sense to stop there.  If we now know what makes the people in ‘Segment X’ different from ‘Segment Y’, why aren’t we incorporating that knowledge into our messaging?

If we were working in a face-to-face environment, this information would inform our choice of words.  A well-known long-standing ‘good’ customer will, of course, be received quite differently to a new face, not quite sure if they’re in the right place.  You wouldn’t use the same salesmanship to sell to an elderly lady as you would to a teenage boy.  You’d incorporate all the context you have at your disposal.

So why would you expect to gain the best response from an activity that puts the same words and pictures in front of every recipient on the list?  The larger your database, the greater the potential to identify distinct differences across the list – and speak to each segment in a context that far more accurately reflects their part in the customer life-cycle.

By that, I don’t just mean the ‘textbook’ groups of Prospects, Triallists, Current Customers, Lapsed and Cold – although that would be a start.  There’s also the possibility to identify ‘Risers’, ‘Fallers’ distinctly from the ‘Non-Movers’ (people who are continuing to exhibit consistent purchasing behaviour).  At a time of flux in the wider economy, how many of your customers are suddenly struggling to afford the things you offer and are cutting back?  How many are now doing well – or have down-traded from a more expensive competitor – and seem to be making a flurry of unexpected purchases?  How do you understand these segments?  And how do you best stimulate them?

Instead of your brand being simply the same version of itself, whoever is reading – like an old comic book from the analogue age – it should really inhabit a ‘multiverse’, where different audiences view it in different ways and you ensure it engages with each of them accordingly.

Of course, we do practice some context-driven differences in our messaging – but it tends to be informed by the medium, not necessarily the recipients.  We’re likely to word our social activities differently because we’re aware of demographic and behavioural biases across them: younger, sharper messaging in Instagram and more professional-sounding, commercially-aware content on LinkedIn.  Largely this is based on assumptions of the profile of each medium and, rightly or wrongly, rarely verified by any analysis of the populations themselves.

So, what of email messaging or, more importantly, expensive direct marketing?  How are they best served by a ‘once size fits all’ approach to large quantities of very different people?

When this happens, we tend to write imprecisely and blandly.  The effect is like Christmas Day television: suitable for all but a bit….boring  It can also risk sounding inconsistent, or even self-contradictory to some parts of the audience – but if there is no seemingly viable alternative, we arrive at a ‘lesser of all evils’ fudge.  It can result in a *targeted mailing*, which – and I’m exaggerating only a little for the purposes of satire – can read a little like this: 

Very often, the justification for this sort of uninspring guff is that the polar opposite seems even worse.  Using our ‘knowledge’ of the recipient to appear to be a benefit to them seems to be an exercise in proving our omniscience – which can easily scare the reader into wondering what the hell else this company knows about them.

There is – as always – a better solution in between the extremes.  Data will always drive these distinctions but salesmanship is still storytelling and, as any film-maker will attest, ’show, don’t tell’ is the best way to go about it.  Customers don’t want to be beaten about the head with how much you know about them; they want to know that they’re understood.  The data you have is the key to demonstrating that understanding.

Let’s take the ‘Risers’ and ‘Fallers’ idea.  Having arrived at a data-led definition of each group, you populate them both with the accounts that meet those criteria and you cultivate an offer which you hope will most clearly chime with their perceived requirements.  How do you then go about communicating each one to each group?

First the ‘Risers’.  They’ve suddenly started to purchase more but whatever brought about this change may easily be reversed.  Their activity needs to be acknowledged and their new-found confidence thanked.  In an unstable market, you can’t expect them to simply remain with you indefinitely – you need to protect this new business.’:

The ‘Fallers’ are giving you the opposite problem.  They may like your brand just as much as they always did but can’t justify maintaining their spend.  The last thing they want to feel is rejected or forgotten.  If they do, they’ll find someone else who values them.  Find an offer that reflects this difficulty and reassure them that they’ll always be welcome and that you will continue to value them:

As any superhero aficionado will tell you, “with great power, comes great responsibility”.  Very often, the ability to manipulate a database of tens – or even hundreds – of thousands of customers feels like an awesome power.  It certainly provides a level of insight and understanding that’s difficult to gain in any other way.  It’s therefore every marketer’s responsibility to make those insights matter, by informing the very best content it can.

Don’t just listen to me on this, consider the proclamation of one of the founding fathers of direct marketing.  The 40/40/20 Rule’ is a principle established by Ed Mayer in the 1960s which states that 40% of the success of a marketing campaign is based on reaching the right audience, 40% on the offer you make to that audience, with only the remaining 20% based on various other factors such as its presentation and format.  

You may be great at the first 40% and I’m sure you’re constantly agonising about the final 20% but are you doing enough to make the middle 40% as good as it could be?

Thanks for reading,

Your friendly neighbourhood Marketing-Man…