For creative campaigns to have a chance of working you first need a good idea of the type of person you're tying to reach. That's just common sense. But the kicker is, how to do it cost effectively and quickly.
Marketing theory will tell you about the sequence of segmentation, targeting and positioning. In other words, chunk up your market, know which parts you want to speak to, and then make sure your messaging is strong enough to resonate with that particular group.
Segmentation is the opposite of saying, “Our products are great and we should hit everyone”. Very few brands have the money to do this, and if they have they still don't want to waste it. Imagine Coca-Cola trying to persuade the lovers of ‘organic juice’ to buy a regular coke?
It’s clear that segmentation is necessary, but what’s the best way?
Characteristic-based segmentation
Years ago defining simple characteristics was enough. Geographic segmentation has always been standard practice. In B2B marketing industry SIC codes and ‘company size’ were common while B2C marketers use, among others, ‘household income’ and a postcode to do the same. The problem is that on their own, simple characteristics are just too simple.
Personality-based segmentation
More recently, advertising agencies have done a good job by categorising customers around lifestyle, individual traits or broad personality profiles. This area is now called psychographic segmentation. It was the origin of that favourite phrase of the 1980s: the “Yuppie”. It was a useful addition – certainly helping to schedule TV campaigns around the right programmes. But to keep up with the audience, marketing has had to move on.
Behavioural segmentation
Customer behaviour tracking is seen as the daddy of segmentation methods. Instead of categorising along broad personality profiles, you track how actual people behave and then match your proposition to those behaviours.
This perspective reflects the broader trend toward ‘relationship marketing’, where understanding the ‘customer experience’ is central.
Actual behaviours are a much better guide to being able to identify likely customers, but then they always were, it was just more difficult and too expensive in the 1980s.
B2B marketing uses the same methods
Businesses now use very similar tools to B2C marketing. Personality profiling and behavioural segmentation is used extensively while other methods are use too. It is also common to group customers around different purchasing methods, deal size and the application of the product.
The secret is to mix it up
Ideally, one should always use a variety of tools to build up a specific picture or profile of your own market. Now, this is much more accessible than it used to be. Technology has evolved with CRM systems and tracking digital traffic, opening up possibilities to businesses of all sizes.
Costs have come down because the tools are more affordable, plus everything is just quicker. Before, only the big brands could afford what was then an offline process, analysing such things as leads, store traffic and sales. But there was an inherent and frustrating time-lag, and this often confused the measurement of marketing performance. Campaign feedback is now more immediate, sometimes in real time. Technology has made this both feasible and affordable, but like everything involving a computer it still brings its challenges. For one, there's the risk of 'data-overload' and there are times when data can appear contradictory. The art is in how to extract and interpret the useful information and this demands a new currency of skills. Even with the 'right' data in-hand, this still needs to be presented in an accessible way, so that everyone can convert valuable insight into effective action.
Post written by Stephen.
