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What Are Market Segmentation Strategies?
CMOs and marketing directors understand that market segmentation strategies divide broad target markets into subsets that are perceived to have common interests, needs, and priorities. But how does this enable marketers to develop fine-tuned marketing campaigns that are relevant, customer-centric, and likely to generate conversions?
A Better Market Segmentation Strategy
As a CMO, market segmentation is not a new concept for you. But even the most experienced marketers will sometimes get market segmentation wrong. Selligent develops innovative marketing solutions to help you put the needs of consumers first—100% of the time.
When done right, segmentation will also allow you to promote a stronger sense of loyalty with customers by making them feel more included and understood.
In the past, CMOs segmented markets into just three categories: demographic, location, and buying behavior. Today, however, customers expect a more personalized buying experience with the brands they support, and marketing tactics have become more granular and sophisticated as a result. Some ways in which customers are segmented today include:
- Personal interests and hobbies.
- RFM, a well-known method for analyzing customer behavior and defining market segments, often used in retail. RFM stands for recency, frequency of purchases, and monetary value.
- Customer engagement, attitude, and satisfaction.
- Propensity models, statistical scorecards used to predict behavior of customers (probability of responding to offers, retention actions or cross-sell offers, likeliness to churn, etc.).
To optimize conversions, utilizing the right segmentation techniques is key. There are many ways to transgress channel-specific segmentation criteria to improve conversions.
Examples include segmentation based on:
- Brand advocacy or social influence parameters
- Interaction with behavioral targeted website content and ads
- Dynamically gathered social feedback or mentions
- Pre-defined changes in CRM contact records
As more and more channels get integrated, and advanced analytics and reporting tools enable filtering recipients based on multi-level segmentation criteria, all channels and online properties become conversion engines through 1-to-1 marketing and highly personalized interactions.
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