customer segmentationMarketers around the world are pronouncing the death of demographic segmentation, and behavioural segmentation has swept in to pick up the pieces.

Thanks to the digital invasion, marketers are armed with the tools to analyse consumers’ behaviour. And as we all know, this is called behavioural segmentation. This has allowed marketers to target based on individual behaviour, which should result in giving consumers a seamless personalised experience. One advantage of behavioural segmentation is that it is fluid, it changes with the customers, and so as behaviours change so does the targeting – but less so with demographics. Behavioural segmentation also allows customers to segment themselves, and therefore create the “segment of one.” It is an evolution of the marketer’s ever evolving toolbox.

However, segmenting customers is not so black and white. And marketers shouldn’t be so cut-throat in shunning demographic segmentation. Demographic segmentation is an important piece of the toolkit. As Tom Lowes, head of online marketing at Sykes Cottages comments on Marketing Week “Demographics are an important piece of marketing and the customer portrait, but that’s just it – demographics are a piece, they are no longer the whole.”

So what marketers need to do is cleverly combine the two segmentation tactics to produce a clearer, more dynamic picture of their customers. For example, ‘Sam’ is a white British male living in London – criteria that are unlikely to change in the near future. However, what may change is how he shops, based on his life changes. For example, if Sam were to plan a holiday, his online behaviour would change. He may read up on the latest sun-spots on his commute home, and then later read reviews on TripAdvisor on his tablet whilst watching the latest episode of Grand Designs.

So what marketers need to do is be agile in the ability to target by his new behavioural triggers, not just communicate with personalised content to Sam, but also communicate on the channels and platforms of his choice.

As Lowes continues to explain on the Marketing Week article, “a person cannot change their gender, age, race or income instantly. But they are free to change what they desire whenever they want, change their behaviour however and whenever they want and intend to do anything they want whenever they want. If we have access to this individual consumer data online, everyone is our demographic.”

Marketers need to adopt a fluid segmentation tactic where people ebb and flow within it. Some brands may have a strict female- or male-only demographic – or be age specific – but almost everyone will, at some point, be a possible target to their brand or service. By using “old-school” demographics together with behavioural segmentation, marketers can create a perfect equation in ensuring they are targeting their most “loyal” users as well as those impulse, occasion-driven buyers.

Marketers need to arrive at a point of continuous segmentation where data is constantly running to inform targeting of messaging, channels used and devices. However, as segmentation now has the ability to run deeper into operations, marketers need to proceed with caution. It is both a blessing and a curse, as it gives the tools to find the right targets at all times. But it also creates a more intricate process for marketers as they will need to ensure that they don’t get lost in the vast amount of data they receive.

 

Source: Marketing Week 

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