What are some examples of geographic features

Segmentation: criteria, methods, applications and examples

3 What is segmentation for?

Benefits for your customers

Unlike mass marketing, which is always a compromise, segmentation enables the creation of User experiences that better suit your visitors.

Today, Internet users simply take a personalized approach, and 91% of them are more willing to buy from a company that offers them customized user experiences.

Benefits for your company

Better knowledge of customers and markets

The segmentation enables a detailed analysis of your customers with their various characteristics. You can see who is most loyal to your brand, who is spending the most on your website, etc. and can target your marketing activities accordingly. And that leads to improved user experience and customer loyalty.

Optimizing prices

Of course, you cannot increase prices overnight. With a precise segmentation, however, you can find out who among your visitors is willing to spend more on certain services.

Improved value creation

The segmentation helps to increase the ROI of your marketing campaigns. Targeted actions for different, well-defined groups or segments show better results and a higher ROI than the same offer for everyone.

4 How is segmentation carried out?

There are two methods of segmentation. Either the rules and criteria are defined in advance (a priori) or customer typologies are created afterwards (a posteriori).

The a priori method

This method is also called "rule-based" because it is based on fixed rules. The visitors are manually divided into homogeneous groups according to certain criteria. The definition of the criteria should be based on a previous analysis.

A fashion brand could segment its visitors according to gender and IP localization and offer women in northern Germany a coat, while men in Spain were shown swimming trunks.

For this method, one must already have a certain knowledge of the visitors and know which segmentation can be relevant for an action. The deeper the knowledge, the more efficient the segmentation. Whereby our example already the Limits shows. Who says that women in northern Germany aren't looking for swimming trunks for their son?

The a posteriori method

With this method, no rules are set, but visitor behavior is observed in order to identify similarities and to create clusters or groups based on them. The similarities are not single fixed criteria such as age, interests, etc., but a combination, e.g. of on-site behavior, customer data and survey responses. The groups that have emerged in this way have more in common.

For example, a segment “Men over 45 with an interest in cars” is not created, but the target group “People who have bought a certain tire model with the targeted special offer and who stated in a survey that they own several vehicles”. This creates a segment that comes closer to the optimal segment “Potential Customers”.

This method requires extensive information about your customers and visitors (including data analysis, surveys, etc.), thanks to which homogeneous target groups can be created. A concrete example is provided by Rakuten PriceMinister, a marketplace where individuals and companies buy and sell items.

If a visitor lands on the website for the first time, PriceMinister cannot know in advance whether it is a potential buyer or seller, there are no fixed criteria with which the affiliation can be determined. PriceMinister therefore uses the posteriori method.

Kameleoon's predictive algorithms analyze visitor behavior, identify the patterns that make up a potential buyer, and allow PriceMinister to create the appropriate segment and offer relevant campaigns.

5 Segmentation and Targeting: What Are the Differences?

Segmentation is the division of your visitors into groups. Not all groups are relevant to your marketing strategy, e.g. because they are too small or difficult to reach.

So you make the decision as to which group you want to target with your promotions, and that is exactly what targeting is.

Targeting is therefore something selective (who should this marketing campaign be submitted to), while the segmentation remains up-to-date for a longer period of time (the segments are, so to speak, available for your promotions).

6 How can segments be prioritized?

Which segments should be primarily targeted? Here are a few elements to help you prioritize:

relevance

The segment must of course be strategically relevant and consist of visitors with high added value potential. They need to have very specific characteristics in order for the action to be precisely aimed and gripping.

Allopneus' “frequent travelers” segment is a good example: It represents 10% of the visitors, but 25% of the turnover: a real value-added segment.

Measurability

The segment must be measurable and profitable, that is, it must be possible to assess how many potential customers the segment contains, what is their purchasing power and their purchasing behavior.

Even if the purchasing power is right, the segment must also be large enough to guarantee the profitability of your marketing campaign.

Feasibility

You also need to make sure that you can easily target your segment and that your marketing campaigns reach the target audience. So on the one hand you have to have the relevant communication channels and on the other hand you have to be able to deliver your products and services.

For example, if you want to address the millennial segment, you should be active on social networks such as Twitter or Tumblr.

7 Applications of segmentation

You segment your visitors - great! What are the next steps? How can segmentation be used profitably?

Personalization of the content on your website

Your website can be adapted to different segments depending on your interests, IP localization or visits to other websites. For example, you can design the images on your homepage, banners or forms differently for different visitor groups.

An example? Here you can read how Allopneus personalizes according to local weather.

Personalization of the user journey on your website

You can also segment your visitors according to their browsing behavior and personalize the user journey depending on the pages they have visited before.

For example, you can display the "most viewed product categories" first, rearrange the categories of your menu or reorganize the results of the internal search engine.

Email personalization

Visitors who have left your pages can be addressed specifically with a personalized e-mail.

For example, the abandoned cart segment could be offered a special offer or free delivery to persuade them to buy.

Personalization of special offers

Depending on their behavior towards your brand, certain segments may receive targeted special offers. First-time visitors could receive a welcome offer, loyal customers a special discount, and undecided visitors an incentive to convince them.

The French e-commerce market leader Cdiscount offers a concrete, very successful example.

Personalized product display

Offer your customers the products they are looking for!

Club Med has, for example, divided its visitors into two segments: families and childless customers, and created specific resort offers for these two categories.

8 Predictive Targeting

Segmentation is an important first step in your marketing campaigns. However, according to Forrester's study for SimMachine, 72% of all marketing teams have trouble finding and analyzing the data they need, and 62% have trouble providing personalized content and recommendations to each visitor. This is where predictive targeting comes into play.