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Segmentation: Then, now and the future

Segmentation: Then, now and the future
 

In today’s era of hyper personalisation, segmentation plays a crucial role in driving customer experience.

Segmentation in the past

Traditionally, segmentation centered around geographic and demographic attributes like age, gender, race, location, and so on. Subsequently, marketers felt the need to include psychographic and behavioural aspects of a customer. For example, a vehicle manufacturer selling a luxury car will target an audience with attributes such as age above 35 years, with a higher income, residing in cities like Delhi or Dallas. In terms of psychographic and behavioural aspects, the luxury vehicle manufacturer will focus on consumers who value quality, status, and live a certain lifestyle.

Segmentation today

Today, brands are looking for more impactful ways to segment customers to yield the most from marketing campaigns. With evolving customers and their sensibilities, marketers are combining various attributes and using it to reach the target customers via personalized campaigns.

Here are some methods of improved segmentation:

  1. Transaction + survey data

Surveys are an excellent tool for attaining quick feedback on a specific interaction between a customer and a brand. These interactions can be evaluated at various customer touchpoints. However, companies today are improving insights from surveys by combining it with transactional data. Understanding customer purchase history along with their preference or feedback is helping brands drive better decisions.

 

  1. Behavioural data

Technology innovation has resulted in data streaming – high volumes of data and at high velocity. Marketers and brands are exploring how they can tap into this data stream to improve customer understanding. For example, brands can now understand the commuting habits of their customers and segment them based on choice of commute, travel time, and explore various touchpoints to target them with relevant messaging. This data is being effectively analysed with analytics tools, to target services and offering more effectively.

Segmentation in the future

The future of segmentation will firstly, command emphasis on the kaleido-dentity trend, where newer attributes will become critical.

Secondly, it will leverage technology to acquire newer types of data. For example, companies are likely to focus on the untapped potential of Urchin Tracking Module (UTM) parameters – tags added to a URL that allow powerful tracking. Not only can these be leveraged to understand where a lead is directed from, but they can also be built into the customer profile.

And thirdly, it will combine various attributes to improve customer understanding. Brands are already experimenting in this area, as detailed earlier, but the future will witness more ingenuity and analytical sophistication.

Segmentation based on a richer portrait of potential customers lifestyle, usage of products or services, transactional data, and overall consumer behaviour will prove rewarding. The key is to deep-dive and mix existing and evolving attributes to arrive at a deeper customer understanding. The ability to sense and embrace ever-growing concepts of identity, and newer, more meaningful attributes will help marketers stay relevant, drive customer experience, and build a unified brand identity.

The author is Vinay Mony, Vice President, Ugam, a Merkle company.

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