Targeted Marketing and More Granular Segmentation

Stephen DeAngelis

February 26, 2014

Back in 2000, Mel Gibson and Helen Hunt starred in a movie entitled “What Women Want.” The movie was about a chauvinistic advertising executive (Mel Gibson) who, following an accident involving a hairdryer and a bathtub, gains the ability to hear what women are really thinking. This new-found ability makes him better equipped to create marketing campaigns for women. In a way, “What Women Want” is a movie about segmentation — in the case of the movie, gender segmentation. If Gibson’s character learned one thing, it should have been that no two women are same when it comes to their lifestyles, tastes, or preferences. Gender is normally too large of category to be of much use in targeted marketing. It falls in the “spray and pray” category. What defines appropriate segmentation depends upon the economic sector in which a business operates. For example, Eric Hazan, Pierre Pont, and Kevin Roche indicate that in the telecom sector, “both usage diversity and polarization necessitate a more nuanced approach to understanding mobile users for successful marketing, product development, service operations, and other key business functions.” [“Smart segmentation: Rethinking offerings based on better granularity,” Telecom, Media, & High Tech Extranet, 17 July 2013 (registration required)] They discuss non-traditional segments like: traditionalists, practicals, entertainers, and omnivores. In the grocery sector, MyWebGrocer and FGI Research claim there are “five distinct shopper types”: Reluctant shoppers, traditional grocery enthusiasts; new digital shoppers; passionate planners; and affluent online shoppers. [“Digital Grocery Shoppers Comprised of 5 Distinct Groups,” Progressive Grocer, 28 May 2013] You’ll notice that neither the telecom nor the grocery segments mentioned anything about traditional categories, like gender, age, income, or location.

“Targeted marketing used to be a case of dividing a contact database along generic criteria such as age, gender, job role or location,” writes Sylvia Jensen. “With a ‘best guess’ approach, marketers could bombard their leads with product information that may result in a sale.” [“Forget Demographics: How to Target Marketing in 2014,” B2C, 27 January 2014] Jensen insists those days are now past. She explains:

“The internet has radically changed the landscape, however, with customers self-educating before reaching out to a brand. This means that marketers now need to reach potential customers during the research phase of the sales process. Most importantly, the information supplied by marketers must be:

  • Relevant to the individual buyer and their needs.
  • Personalised wherever possible.
  • Designed to foster a relationship between the customer and your brand.”

Amit Deshpande agrees that marketing is entering a new era and that “segmentation can now unearth greater customer insight.” [“Get Insight That’s Actionable,” Direct Marketing News, 1 March 2013] Jensen proposes five steps to create an effective targeted marketing effort: “Clean your existing contact data set and augment as necessary; carefully analyse your data for new opportunities and insights; map out the customer journey and personas; create content targeted at each of your personas and segments; and implement automation to improve the experience for your customers and the returns on your marketing investment.” Concerning the first step — cleaning your data — she writes:

“If your customer database is full of outdated contact information, any campaign it is based on will always fail to recognise its full potential. It is impossible to target leads properly when the information by which you segment them is incorrect. The first step to improving your marketing for the New Year is to:

  • Delete data that is known to be ‘dirty’ or outdated.
  • Update records that are incomplete.
  • Consider purchasing a targeted mailing list to provide a fresh dataset from which to work.”

Jensen’s point is a good one if your marketing campaign is aimed at existing customers. Deshpande agrees. He writes, “Historically, in most organizations, segmentation is ‘refreshed’ only periodically, between monthly to once a year, driven by data refresh schedules and associated process challenges. … As customer data is being refreshed in a timelier manner than in the past, it’s only logical that to benefit from such information, organizations must improve on the segmentation refresh frequency, driving it towards near real time.” If you are not marketing to current customers, you’ll probably be looking for data rather than cleaning it. Concerning her second step — analyzing your data — Jensen writes:

“Once your contact database has been cleaned, you will already have a number of valuable insights which can be used to segment leads, identify potential opportunities and more. The overall goal of analysis should be to prioritise segments which present the best potential returns to your business. You should also be constantly collecting new data about leads and clients to ensure that you have a detailed picture of their preferences, habits and purchasing interests. This information can then be used to create ‘personas’ – useful for the content creation process.”

To learn more about creating personas, read my post entitled “Creating Useful Personas for Targeted Marketing.” In that post, I quote Leslie Ayers, who wrote, “Persona marketing entails creating fictional yet fact-based profiles of your customers so you can market to them more effectively.” Concerning the next step — mapping the customer journey — Jensen writes:

“Your new marketing strategy needs to:

  • Become more personalised.
  • Leverage automation to better serve the customer.

To assist with automation, you need to identify the stages of the customer journey and the information you need to supply at each to help move them along the sales funnel. It is imperative to define triggers that are propagated by the client – the information needs to be pulled by, rather than pushed at, the client. Trigger points include customer actions like website visits, document downloads, email enquiries and sales calls. [Gartner research determined,] ‘Event-triggered marketing can potentially save 80% of your direct mail budget.'”

In a post entitled “Digital Consumers and Their Path to Purchase,” I discuss a study conducted by GroupMNext and Compete that discusses six distinct digital customer segments and their path to purchase. Understanding how consumers reach a purchasing decision (i.e., mapping the customer journey) can provide some interesting insights. On the subject of creating marketing content, Jensen writes:

“With the personas defined and triggers identified, your marketing team now needs to craft the messages that are given to the client. The more detailed your persona definitions and the finer the triggers, the more targeted the text, tweet or video content can become. By being as tuned as possible, the content is of greater value to the lead, helping establish your brand’s expertise and providing the information your lead needs to make a purchasing decision.”

The whole point of targeted marketing is to get the right message in front of the right person at the right time. Linda Fox reminds us, however, that there is a continuing “debate around consumer data and how and when they are targeted with relevant advertising.” [“Is online marketing getting more sophisticated or just more annoying (and a bit creepy)?Tnooz, 29 April 2013] In answer to the question posed in her headline — “Is online marketing is getting more sophisticated or just more annoying?” — Jensen concludes, “It’s probably both.” In other words, companies need to aware of the fine line they are walking once they start down the targeted marketing path. Because targeted marketing campaigns are automated (i.e., triggered once specific criteria have been met), executives might be oblivious to campaigns that cross the line. Nevertheless, Jensen believes that automation is critical to success. She writes:

“With all the groundwork laid, you are now in a position to set the automation marketing machine in action. Your existing CRM system may provide the required functionality, or you may need to investigate a suitable platform that interfaces with your other business intelligence systems. Automating the marketing process ensures that the right information is delivered to each lead at exactly the right time. Your team can then focus on converting the leads coming to you. [Gartner research determined,] ‘Companies that automate lead management see a 10% or greater increase in revenue in six to nine months.'”

Clearly, Big Data analytics is having a significant impact in the marketing arena. But, as the above discussion, reveals, analytics and common sense both have a role to play if targeted marketing campaigns are going to be effective and avoid crossing the line into the creepy zone.