We’re in a golden age of marketing segmentation and automation. Marketers are benefiting from being able to personalise marketing messages using automation systems that segment us according to the choices we make, what we do, what we view, who we talk to and what we spend.
Martin Hayward of Hayward Strategy and Futures recently wrote an interesting article about marketing segmentation through the ages. His historical analysis of how marketers have changed their segmentation techniques makes interesting reading:
1. You are what you earn – still used extensively today, this model grouped consumers by social class. This model assumes that class, employment and consumer spending power were related. For example, the professional classes include lawyers, doctors and accountants could be assumed to have different lifestyles and disposable income from tradesmen including plumbers and electricians.
2. You are where you live – again, still of use today, especially for direct mail campaigns, this model makes assumptions about the relative affluence and lifestyle of a consumer based on their specific postcode.
3. You are what you say you are – this was popular in the 1980’s era when marketers became very interested in responding to consumers based upon their responses to lifestyle preferences and choices. This had limited value due to the paucity and inferior quality of the available data.
4. You are what you do – the emergence of Big Data led this revolution which has been championed by supermarkets and their loyalty cards. The collection of a huge amount of data about our spending habits has enabled a more targeted marketing approach. The data revolution, together with the growth of social media and pay per click advertising means marketing has never been more laser-like in its ability to respond to our behaviour online, as evidenced by Facebook, Google and Amazon.
Martin’s prediction for the next phase of segmentation is “you are what you choose to share”. He believes this will be a logical step for consumers as we come to appreciate the extent to which we share our personal details and make a concerted effort to control and regulate the data we allow organisations to capture.
So, apart from being a bit of fun for older marketers like myself to appreciate, what would be a useful take-away from this model for a business and the marketing strategy to adopt?
Firstly, I would argue strongly that any way a business can define their ideal customer is valuable information. I spend a lot of time with my clients helping them to research and refine their ideal and we still use size of business and geographical location as a part of that process. The ‘big brother’ world of web tracking and social media allows us further insight about on our prospects, which add more colour and detail to our picture.
Secondly, if we know what brands a person buys, who they associate with, and what they are interested in watching or doing, we can tailor messages that resonate with their world. Over time, tailored marketing gives a better return on investment as we focus on the issues that matter to them. Understanding what issues excite them, what tone of voice we should use and when we should talk to them etc allows us to build stronger, more lasting relationships with potential customers. In short, we can become better at establishing trust.
Thirdly, business owners need to keep an eye on the future trends that will change the way we do business. The era of permission based marketing is fast approaching and business needs to be aware of how both existing and potential customers could react to the use of their data. One of the benefits of using marketing automation is it allows marketing to be permissions based. Customers need to behave in a certain way before we send them more information, and they can choose whether to receive it. In the future, customers may be warier of their behaviour and more reluctant to share information than before. Marketing content will need to be more relevant to the recipient than ever before if consumers exercise more discernment in their choices. Are you ready?
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