If you want to convert more leads and create better value marketing strategies then you need to start segmenting customers.

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What is customer segmentation?

The term customer segmentation describes the process of dividing your current customer base into smaller groups of contacts who have similar characteristics.

This process helps businesses communicate with their customers more effectively. As each customer has different needs, one business' marketing campaigns might not effectively engage with all of their consumers. However, segmenting customers helps them focus their marketing on the needs and wants of each different group of customers. 

Why you need to segment your customer base 

Segmenting your customer base helps you target your selling strategies to the right people.

As an inbound marketing company, we know the best ways to engage with a customer is to offer them relevant information. Customers want businesses to understand what they want and you can do that by segmenting your customers into specific groups that best describes them. 

different customers

One email will probably not engage with all these customers

It's likely you have different types of ideal customers. Each Buyer Persona will have their own interests and reasons for wanting to buy from a business like yours. Segmenting your customer base can help you arrange your different ideal customers into separate groups.

By separating your customers into different groups you can get a better understanding of each group, like:

  • What are their interests?
  • What are their shopping habits?

You want to understand how each of your ideal customers tick.

As you get to know them better (try creating your own Buyer Personas, to increase your knowledge), you can create marketing strategies and messages that will have a higher chance of engaging with each customer.

For each group, you can improve the effectiveness of your marketing by creating an individual tone of voice, images, language, content topics and strategies. Customers react better if they feel like they can relate with what the business is talking about.

Along with getting to know your customers better, a segmented customer base helps you send relevant emails and offers to the right people.

Right, we've talked about what customer segmentation is and why you should do it, so let's go the extra step to explain all the benefits they offer your business. 

The unmissable benefits of customer segmentation

1) It will save you money

If you're sending out marketing messages and special offers to specific groups in your customer base, you're not wasting resources on the other customers who aren't interested.

Along with email, you can target your customer base via social media. As paid social ads can be costly, you can lower the cost and maximise the chance of conversion by creating social paid ads the customers you want to target will engage with.  

2) Your conversion rate will shoot up

Segmenting your current customers will put you in the right direction for getting higher conversions.  Customers will more likely respond to emails and marketing campaigns if they find them relevant.

From our own experience, inbound marketing has a lead close rate of 14.6% (compared to outbound at 1.7%) because inbound strategies focus on creating relevant information for interested customers. Inbound has helped boost lead generation for B2B businesses.

3) You won't have to send as many messages out

Just like saving money, you can also send less messages. As you'll be spending a bit more time creating high quality messages that will engage with your specific customer groups, you won't need to send as many messages because you're creating relevant messages that target your customers effectively.

4) The data you collect will be bullet-proof

Any feedback or comments you receive from your ideal customers will be more valuable because they can help you improve the experience for other customers in their group.

5) Your unsubscribe rate will disappear

Every so often you open your emails and see another SPAM email from that company you bought from months ago. The actual email does contain thoughtful and high quality content but for you, it looks nothing different to spam because it's just not relevant. Many people will only accept so many emails before they decide to redirect all emails to the junk folder or unsubscribe altogether.

Sending relevant emails to your different customer groups means they will more likely open your emails and have a read. 

6) You'll quickly spot your most profitable sector

Over the years, you will recognise which type of customer is more willing to spend money. As they are your most profitable customers, you can segment them so their emails can be more focused. 

7) Loyal customers will become promoters

You'll likely have a list of loyal and returning customers. And if they keep coming back, you know you're doing something right.  You can reward loyal customers by giving them exclusive gifts - they will likely appreciate the extra privilidge and spread kind words about your business aka. free advertising.

8) You'll be able to research and identify new products and services

Just like getting valuable feedback, your ideal customers can highlight what products and services would benefit them. If you can see there is a profit from expanding your current business, you can tempt more customers to come to you.

There are many benefits to segmenting your customer base, you can increase your own knowledge about your customers and improve your current marketing strategies at a smaller cost.


REMEMBER:

Segmentation and Inbound Marketing go hand in hand

Inbound Marketing is all about relevance and context. If you want to convert more customers and boost lead generation, consider how Inbound Marketing can help you.

Segmentation is just the start of a journey to grow your business at a fraction of the price of traditional marketing methods.

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