The How’s of Data Segmentation

It’s no secret that data segmentation can have a profound, positive impact on marketing results.  The benefits of data segmentation can be seen in every area of your demand generation according to this study by Lyris:

However, the practice of data segmentation is still something that many marketers are struggling to master.  Consider the following from HubSpot  and eMarketer:

• 32% of marketers listed segmenting their email database as one of their top priorities
• 52% of marketers say they have a great need to improve email database segmentation
• 55% of marketers list “reaching their target audience” as one of their top challenges.

While many marketers understand the need to segment, I believe the challenge is understanding how to properly segment.

Before we delve into the how and what, it must be understood that there are two levels of segmentation.  Account segmentation and buyer/customer segmentation. Both must be considered for maximum effectiveness.

Account segmentation helps focus your organization, making sure you have the right account targets.  There is no use in targeting contacts in accounts that are not a good fit for your offering or targeting accounts that will not have a budget for your solution.  If the average sale price of your product is $100,000 there is a high probability that SMB accounts will not be a good target.  Be sure you have an understanding of what type of accounts are the best targets for your offering.  One of the outcomes of Account Segmentation may mean you reduce the number of accounts in your database as you become more targeted. In my opinion, this is a positive result as it means you are more disciplined in maintaining your database. Why keep an account in your database that will never buy?

Buyer segmentation is focused on the individual, allowing you to better customize your message to that individual and getting better results.  Here are a few quick tips on how to improve your segmentation:

1.     Segment by Function not Title

I once encountered an individual who had the title of CMO.  Given that I was in sales for a marketing firm at the time, I was quite excited to have time to speak with this individual.  My excitement was short-lived as he explained to me that CMO stood for Chief Morale Officer.  I am not sure what that role is, but I was certain that he was not my ideal target.

Why this specific example is a bit out of the norm, it proves the point that titles can be faulty as key indicators. Think of organizations that have a myriad of VP titles, while the individuals carry the title, in reality, they do not carry much decision-making authority.  This is why it is vital to look at functional roles in the organization as these will be much more accurate and allow for a better targeted approach.

2. Segment on Buyers Needs & Pain Points

I find it amazing that many organizations have gone through the exercise of developing buyer personas, but cannot tell you what challenges their customers face on a daily basis.  If we do not understand our buyers pain points, it is virtually impossible to deliver content that appeals to them and addresses where they are in the sales cycle.   Detailing these pains and documenting the challenges enables better segmentation.  This in turn feeds into the ability to create more relevant and targeted content.

3. Segment on Stage of the Buying Process

Not only do we have various buyer types, but each of those buyer types is at a different stage of the buying process.  It is of utmost importance to know if your buyer is at the engage, nurture or conversion stage of their buying process.  If you have no understanding of where they are, you won’t know what to say to them.  The buyers purchase path must be something that is understood and segmented properly so you can better tailor your content and engage with them appropriately.

4. Don’t Stop!

Data segmentation is not a one and done activity!  It is something that must always be a focus and done consistently.  As you collect more information on your buyers and customers, you will be able to refine your segmentation.  This takes work and effort, but it will vastly improve your results.

With over half of marketers knowing they need to improve their segmentation, it is time to stop talking and begin doing! Begin the process and keep at it.  Not doing anything about segmentation is not an option if you want to drive revenue.

Author: Carlos Hidalgo @cahidalgo is CEO and Principal, ANNUITAS