3 Common Pitfalls of Segmentation and How to Avoid Them

When it comes to consumer segmentation—the primary of the 4 core pillars of personalization—you possibly can’t have a one-to-one dialog with every buyer with out first breaking your viewers down into neat, little segments.

In this segmentation course of, although, there has to be intention. It can be peak inefficiency to take a look at your viewers and go one-by-one tailoring a particular message for every particular person. While a probably nice neighborhood or relationship builder, the shortage of scale and automation would drive your group mad.

Instead, we check out similarities (and variations, as you’ll see) to construct segments, which make a marketer’s life simpler and a shopper’s expertise extra personalised. A real win-win scenario.

What Segmentation and Cooking Have in Common

That mentioned, typically we’re inclined to treating segmentation like a brand new recipe we’ve simply discovered. You observe every step completely and use each urged ingredient as a result of the recipe has a confirmed observe document of success with out actually questioning whether or not these parts are best for you or your dinner visitors.

Segmentation, very similar to any recipe, is malleable and has to be contextualized to be handiest. Your enterprise wants and these of your customers should be considered when constructing out segments. Otherwise, one or each of you’ll be left with a bitter style in your mouth.

So, with that in thoughts, we’ve compiled a listing of three pitfalls of segmentation that generally come up from conventional strategies and clarify how one can successfully keep away from them.

(Pro tip: Hate studying? Check out the video on the backside of this submit to be taught extra about these pitfalls and the methods to keep away from them.)

The 3 Pitfalls of Segmentation to Avoid

1. Correlation vs. Causation

You’re possible accustomed to the distinction between correlation and causation, however when taking a look at segmentation methods, it won’t be as apparent. In this example, we’re speaking about understanding and contextualizing the outliers in buyer knowledge.

Let’s begin with an instance: Maybe you’re a person who loves shopping for males’s garments. Regardless of your gender expression, you’re a loyal buyer of your favourite model and have been shopping for males’s garments for years. As you may anticipate, you might be receiving promotions for menswear. Nothing out of the strange right here.

But this final 12 months, you bought a costume for a particular somebody in your life who loves a cultured sheath, dipping into ladies’s clothes from this model for the primary time. Now, with the latest piece of knowledge in thoughts, the model sends you a stream of promotions for attire and different ladies’s clothes objects.

Clearly, you might have entered a brand new phase primarily based on the correlation between “bought a dress” and “buys dresses.”

Rather, segmenting primarily based on causation seeks to perceive the context and reasoning behind a purchase order. In this manner, the information can be utilized to successfully delineate messaging and merchandise within the right context for every particular person.

A fast treatment for this segmentation pitfall may very well be one thing like a post-purchase pop-up or polling email that asks the shopper concerning the cause for the acquisition (both for your self or as a present).

In realizing the aim of the acquisition, the marketer can place that particular person in the best phase, equivalent to “primarily purchases men’s apparel, but receives recommendations for women’s gift items.”

2. Historical vs. Current Events

A key piece of segmentation is the historic knowledge that entrepreneurs have within the consumer’s profile—what they like and what they’ve completed. Sometimes, although, this may omit a giant piece of contextual info: what is going on on this planet across the consumer!

This 12 months, more so than most, has been a shining instance of weighing historic knowledge in opposition to present occasions. Consumer priorities have shifted. General inclinations have modified and will proceed to change at a fast tempo. Marketers have to sustain, and half of holding tempo is incorporating present occasions into your consideration for segments.

The instance beneath reveals how Taco Bell is shifting to accommodate in-store eating closures in sure areas and the discomfort some diners really feel in areas the place eating places have reopened. To assist out, they’ve given customers a number of decisions to swimsuit their preferences and contextualized this in opposition to historic knowledge of the consumer’s favourite objects. 

This segmentation technique continues as customers make alternatives for his or her eating preferences (supply vs. in-store) and subsequent messaging takes this into consideration.

3. Similarities vs. Differences

As talked about above, the creation of a phase typically hinges upon similarities—individuals who like hats, lovers of sushi, residents of Austin, TX, you title it.

But it’s additionally necessary to take note of the opposite facet of the coin to keep away from this frequent segmentation pitfall. After all, our variations are what make us distinctive, and understanding a consumer’s uniqueness makes personalization that rather more efficient. 

This pitfall particularly touches on segments which are sliced too broadly, capturing a wider swathe of preferences with out contemplating motivations. Segments are sometimes made and whittled down utilizing dichotomous actions (buyer vs. non-customer; free vs. paid), however in doing so, intrinsic behaviors are brushed apart.

Consumers make actions primarily based on elements, like how merchandise make them really feel or how they fulfill their wants. The handiest segments discover a means to contact on these motivations.

Take meditation for example. Some meditate to cut back nervousness. Others meditate as a type of psychological health. While these might sound related—and for some, there may be an overlap—these are fully totally different motivations that warrant totally different approaches from a model like Calm, which you’ll see within the messages beneath.

By recognizing motivation and refined variations, equivalent to these, messaging takes on larger relevance and resonance with customers, main to elevated engagement and retention.

Using this tactic, Calm noticed a 4x enhance in income via testing and optimization of its onboarding sequence for brand spanking new members.

Avoiding These Pitfalls of Segmentation

There’s no disgrace in seeing these pitfalls and admitting you fall sufferer to them. They’re refined and straightforward to miss, however they are often averted with a couple of safeguards.

When contemplating the place to begin, at all times bear in mind to:

1. Put the shopper on the heart of your technique relatively than model, value or promotion.
2. Emphasize context and private values because the keys to one-to-one relationships.
3. Take atmosphere into consideration. It will assist you perceive buyer wants and priorities.

For your knowledge, it’s necessary to:

1. Continually assess your necessities to establish what’s wanted to drive personalised experiences.
2. Refresh and verify buyer knowledge recurrently to confirm its validity and relevance.
3. Use progressive profiling to always be taught extra about your customers.

And lastly, it’s simply good advertising and marketing to report the progress of your segmentation methods (even weekly, for those who imply enterprise), so you possibly can iterate the place wanted and optimize your outcomes.

So there you might have it! The commonest segmentation pitfalls and a couple of easy steps you possibly can take to keep vigilant and keep away from them.

If you’re serious about diving deep into the subject of consumer segmentation, you must check out our current Personalization Playbook that reveals you the way to construct the right viewers!