In a recent blog post we talked about the importance of your first party data and the challenges that brands face in creating personalised customer experiences.
Today, we are going to focus on the data that you hold in your database or Customer Relationship Management (CRM) solution. This can either be people who have purchased your product or service previously or shown interest e.g. by requesting a sample of your product or by signing up to your newsletter.
Understanding the volume of customer records you hold within the database, their status and what triggers a purchase is at the heart of defining your specific customer groups. Before creating segments, it is essential to understand the data that you hold. For example start-up brands or established brands with low levels of monthly or annual sales are less likely to benefit from segmenting their customer information due to the maturity of their data. Conversely, a common challenge are that brands can create too many segments, with little value realised. So, the key is to start simple and grow from there.
Agnostic of what product or service you are selling, you should start by understanding what your average customer looks like and then looking at the factors which drives sales and repeat purchases or usage of your service. The questions you should pose will subtly differ by sector
If you are selling a product where repeat purchasing is important e.g. retailer or travel company, you should look to answer the following first:
For technology and publishing brands, where subscription models are more prevalent, the questions being posed will change slightly, such as:
Irrespective of the sector, the questions you have answered should help you identify at least four customer groups:
The below demonstrates a simplified version of how customer status’ can change over time, which require different messaging and tactics to be deployed across your digital marketing and website.
Once these segments are created and you have proven the value in personalising your customer experience, you can then further segment, based on what triggers them to make a purchase from your brand. These triggers include understanding whether they:
The list of possibilities are endless, however once again the secret to success is understanding whether you have enough data to make a difference to your performance.
In summary, starting with the basic four segments should be the starting point for any brand who has enough customer history. You also do not need technology in place to answer these questions in the short term, as long as the data is accessible and in a consistent format. You will however need marketing technology to support when you are using the data to personalise your customer experience, due to the fact that their status’ will change.
To understand the best approach to personalising your customers experience, contact us today for a free consultation.
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