In this age of globalization and technological advancement and the advent and unprecedented success of the social media, to be able to connect with the prospective customers and most importantly to be able to segment the right customers, is the key for a business to be able to sustain, maintain and grow as an entity.
In an article by John Rampton, a regular contributor on the Forbes website, elaborated on the significance of how better data has become an important marketing tool to be able to do segmentation in an effective manner, and allowing the marketers to analyze each segment in a different manner with data driven strategy.
The article showcases the importance of the digital world that has enabled the data to be attained in a very accessible manner, and more importantly in an intimate manner that has enabled the marketers to understand the potential customer on a more personal level.
There are multiple types of data that are available with regards to structured and unstructured, real time and static data, and the best way to utilize them is to analyze them together and they are as follows (Million).
Activity-based data: this data is activated by tracking the web information, buying histories of customers, call center data, mobile data and the response to tactical campaigns.
Social influence/sentiment data: This consumer data collected from the product/company associations that includes the customer’s likes or follows the interactivity and engagement in relation to online comments and reviews; and following the customer service records (Million).
The main premise of a marketing plan is to generate awareness, by positioning the product to maximize the value through communication to the right segment, and since the intent is to generate loyalty it is important to group the customers on their customer life time value (LTV), and as a result, it is very important to segment the customers through the data according to their LTV (Optimove).
The importance of data and how it is changing the face of marketing trends and business deals can be gauged from the fact that, in the first quarter of 2015, a mega $6.2 billion deals were sanctioned that related to marketing technology, and more than two-thirds of the deals were in relation to intelligence and data (Spencer).
The article points to the fact that the data needs to be top class in terms of understanding the customer patterns, and the metrics mentioned such as average time on site and average conversion ratio, are not as valuable in terms of gauging real time analytics, browsing device data.
The software giant Andreessen Horowitz understands the trend with regards to the need of the a data driven marketing environment and last year announced a $65 million funding for a Silicon Valley Web analytics company, Mixpanel.
Rampton shared his personal intent with regards to allocating 80/20 rule, that in essence meant that the 20% effort is devoted, to anticipating customer needs with targeted data.
The issue with the data driven marketing starts with the decision making, since, excess of everything makes simple things complex, and this is apt for data driven marketing, since, with so much data available, the utilization of the data effectively, needs to be the top priority of the marketers.
The data collected through the website traffic, as reported by Rampton, accounts for 30% for first time visitors and 70% repeat customers, and the conversion rate is 2% for first time customers and 5% of repeat customers.
The most important aspect of segmentation is twofold that starts with understanding the customer segment for a particular product or service and then expanding on the data collected in view of the changing trends, lifestyle patterns, buying influences, past patterns and most significantly the avenues that are utilized to gain the product information.
There are many tools in the market that do the job in an effective manner and once such company is Marketing Evolution, helping companies by leveraging big data to be able to tap into the most relevant data in an effective manner (Spencer).
The dynamic nature of the business environment, has led the companies, to remain up to date in relation to the changing facts and figures of the market and more importantly the customer’s needs and wants.
Big multinationals are utilizing the data driven content strategy to create buzz and a direct connect with the targeted segment, Kraft has been utilizing the data to create targeted content for its customer base.
The company realized that it is imperative to be precise, and the segments were brought down to 40, such as, Spanish consumers, Christmas planners, cheese interests and so on so forth, and the example of Kraft targeting customers, and then utilizing that relevant data, to launch a new fiery line of cheese, is an apt example of utilizing the data intelligently to target a segment.
The importance of data in relation to segmentation is that the modern day customers are living in an age of digital connectivity, and the digital foot prints left by them, enables organizations, to collect, insights, data, analytics, that enables, targeted segmentation.
This helps the organization in the most important element of an the business, that is, giving better return on investment (ROI) and therefore, to be able to create a loyal segment the usage of data holds the key to modern marketing on a strategic and tactical level.
The spending on marketing analytics is expected to be doubled in the next 2 years to approximately 12% (Spencer), and most important aspect that the marketer needs to take care of is understanding the metrics that will be able to give them pinpoint direction towards the most lucrative and targeted segmentation.
Customer segmentation has evolved into a new territory that showcases and highlights the behavioral attributes on social media and other digital platforms, providing marketers with a more relatable view of the customers with reliable data.
Works Cited
Million. Customer Segmentation in the age of Big Data 2015. Web 28 Apr, 2016.
Optimove. Customer Segmentation 2015. Web 28 Apr, 2016.
Rampton, John. Better Data Enables Better Customer Segmentation.
Forbes 2015. Web 28 Apr, 2l016.
Spencer, Jean. 4 Marketing Analytics Tools That Are Shaping the Industry.
Entrepreneur 2015. Web 28 Apr, 2l016.
Viveiros, N, Beth. Data Helps Kraft Cook up a segmented Content Strategy. Chief Marketer 2016. Web 28 Apr, 2l016.
