The job of a marketer is to build relationships with consumers. In the past, marketers accomplished this with wide-ranging communication — essentially, “spray and pray” methods. Today, however, consumers demand tailored messages that speak to their exact preferences. Instead of a “one-to-many” approach, marketers must use a “one-to-one” approach.
McKinsey & Company’s “Next in Personalization 2021 Report” found that more than 70% of consumers expect personalized interactions from brands. What’s more, 76% of consumers reported feeling frustrated when companies don’t provide those interactions. And the brands that do personalization well generate 40% more revenue from their efforts than standard players.
To offer the kind of personalized communication consumers expect, you must leverage digital consumer segmentation by creating audience groups based on demographic data. In traditional advertising, this could be done by airing commercials in several countries and several different languages. In digital marketing, this could be done by sending personalized email campaigns based on the items currently in a consumer’s cart.
When done right, marketing audience segmentation allows you to reach consumers at exactly the right time with relevant content, such as personalized product recommendations. However, there are roadblocks to successful consumer segmentation.
For one, traditional segmentation often limits a consumer to one persona. In reality, consumers wear many hats, and ignoring that fact means you can’t offer them the most personalized experiences. Second, manually sorting all your data into target consumer categories can be time-consuming and overwhelming. You often can only segment 10 to 15 groups at a time, and it’s all too easy to leave out whole segments of consumers while specifically trying to market to others.
Lastly, traditional segmentation can get stale in a hurry if done improperly. For example, if a consumer falls into multiple segments, you might inadvertently spam them with advertisements for each category.
Achieving effective digital consumer segmentation to improve the consumer experience can be done — but only with a more dynamic type of segmentation.
Using Digital Consumer Segmentation for Predictive Personalization
Dynamic audience segmentation is a great first step on the journey to predictive personalization. It helps you go beyond just basic demographics to segment your audience based on other salient factors. It also lets you segment consumers in real time, without the need for manual involvement.
Think of digital consumer segmentation as part of the journey to true personalization. You can’t achieve real personalization without it. When enabling dynamic audience segmentation, you can focus on more significant strategies, such as increasing sales or conversions, because personalization will already be in place.
Ultimately, the goal is to meet consumers where they are and fulfill their needs at those specific moments. Remember, a user who fit into a certain audience segment the last time they visited your site will not necessarily fit into that segment during their next session.
Many marketers fall into this pattern of thinking, using historical data to create personalized experiences that don’t measure up to consumers’ expectations. Of course, historical data can be beneficial for identifying patterns over time, but it shouldn’t be the sole focus of dynamic consumer segmentation.
Consumers’ preferences are ever-changing. Instead of placing a consumer neatly into one little box based on their past behavior, you should use their purchase and search trends to move them from box to box (or segment to segment) when necessary.
Improving the Consumer Experience Is a Win-Win for All
To meet consumers’ expectations, you must provide individualized experiences. By using dynamic digital consumer segmentation, you can create truly personalized marketing campaigns that improve the consumer experience and generate more revenue. After all, the more relevant the experience, the more likely consumers are to convert and become loyal brand ambassadors.