Segmenting Is Dead: Shift To True 1:1

by Mark Sten, Nov 18, 2010, 5:00 AM

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Isn't it time that marketers stop shooting for the average and start maximizing ROI for every campaign they execute? With hundreds of behavioral and demographic attributes to leverage, mobile carriers have the opportunity to stop targeting the "best" offer for a segment of customers and start marketing to each customer as a "segment of one." Why would the same offer be the "best" for you, me, and 100 of our friends? It wouldn't if you're looking to maximize ROI on every campaign.

Just think -- with traditional A/B testing you might see that Offer A gets a 3% response and Offer B gets a 2.5% response. So you roll out Offer A, the "best offer," to everyone. But what if you dig deeper and see that males respond at a 4% rate with Offer A and females respond at a 5% rate with Offer B? By applying just one demographic trait and targeting A to males and B to females, your overall response rate increases to 4.5% -- a 50% lift! Now what if you could rapidly determine the best offer for each and every customer?

The benefit of true 1:1 marketing is clear -- personalized, relevant offers lead to higher conversion rates. But how many carriers are equipped with the tools to understand an individual's needs and immediately act on them?

According to a study by Aberdeen Group, "Marketers are focused on delivering a clear return from their investments. And to demonstrate strong program results, one area reigns supreme -- accessing and understanding customer data." With mobile, the quantity and quality of data easily surpasses that of any other channel. But how does a carrier effectively consolidate, analyze, and act on the data -- without a team of 2000 marketing and analytics experts?

Although traditional campaign management tools are effective for executing segment-based campaigns, the required manual intervention and dependencies on other systems and teams for data and analysis limit the potential for true 1:1 marketing. Carriers need the tools to determine the best offer for each individual customer, versus which customers are right for the latest product offering. By enhancing traditional systems with automation and machine learning capabilities that can do the work of an army of analysts, marketers can rapidly determine which offers work best for whom, allowing them to move smarter and faster while driving better results.

Determining the best offer for each customer is the first step, but how do you further improve your targeting success? By delivering the offer in the right context. Someone's needs on Friday afternoon when they're about to leave the office are very different than their needs on Tuesday morning when they have just woken up. The ability to target a context means understanding, for example, whether someone has just powered up their device, has been browsing the Web or texting a close friend, is topping up their account or traveling on business. And the operators have all of the data to know this.

By not incorporating context, marketers may miss the boat. As Aberdeen Group states: "Failing to leverage customer experience data from the myriad of sources will be the difference between success and failure."

Carriers must shift from blasting large segments of customers to delivering highly personalized communications -- ensuring that every offer is full of value. Only then will carriers maximize returns -- increasing sales and truly satisfying customers.

Leading Tier 1 carriers taking advantage of contextual marketing to increase mobile data usage, migrate customers to higher rate plans, and increase prepaid revenues are seeing a 10% to 200% improvement in the success of their campaigns.

We'll let the numbers speak for themselves.

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