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7 Ways segmentation can help your business get more conversions

7 Ways segmentation can help your business get more conversions

You create ads, emails, blogs, videos, and other content to convey your business’ message to your audience and make them subscribe, share or purchase. However, conversions happen only when the content you created appeals to the audience you have designed it for. This is where segmentation helps. 

For, segmentation is the division of your audience into several identifiable and manageable groups to let you send more personalized and targeted content that better suits each group. You can segment your audience on the basis of different factors such as their demographics, interests, geographic location, devices, online behavior and more.

In this blog, we’ll discuss seven ways in which segmentation can help you get more conversions. But before that, let’s get into the basics. 

What is segmentation?

Segmentation is the process of diving customers and prospects into accessible, definable, actionable, and profitable segments based on similarities in their characteristics, behavior, or preferences. It helps businesses and their marketers to understand their consumers better and tune their messaging accordingly.  

Various types of segmentation techniques exist. These include-

  • Geographic segmentation: This involves segmenting users based on their geographic location. 
  • Behavioral segmentation: This involves segmenting users based on their online behavior.
  • Psychographic segmentation: This involves segmenting users based on their interests, emotions, preferences, and more. 
  • Demographic segmentation: This involves segmenting users based on their demographic characteristics such as sex, age, income, social status, nationality, and education. 
  • Predictive segmentation: This involves segmenting users based on the likelihood of them taking certain actions in the future. 
  • Cultural segmentation: This involves segmenting users based on an understanding of their social behaviors, attitudes, and traditions embedded in the community they belong to.
  • Occasional segmentation: This involves segmenting users based on universal occasions (Christmas, Father’s Day, Mother’s Day, Valentine’s Day, etc.) or personal occasions (birthdays, anniversaries, etc).  

Why is segmentation important?

Your consumers come from different backgrounds and have different needs, preferences, and interests. So, you always have a mixture of audiences. There will be people who like your brand, some who do not, some high-paying ones, some low-paying ones, some from a particular industry, some from others, and more.

Your messaging and marketing and sales pitch need to address the varying needs of your consumers rather than targeting them with a one-size-fits-all approach. Statistics says that segmenting your audience can-

  • Uplift your sales by 89%.
  • Increase your average order value by 58%
  • Significantly reduce the time taken to buy a product (A site called Musiclawcontracts found that it went from about 20 minutes to under 6 minutes for them after segmentation).
  • Increase conversion rates. For example, segmented email campaigns have 14.31% higher open rates than non-segmented email campaigns. 
  • Lower customer acquisition costs. For instance, MetLife, an insurance agent, announced that segmentation helped it save $800 million annually. 
  • Drive impulse purchases. 49% of the survey’s participants said that they bought something that they never intended to buy because it was presented to them with a personalized message. 
  • Help better understand customers better. Businesses that segment their consumers are 2.3 more likely to understand buyer intents and 1.6 times more likely to understand their challenges and fears than businesses that do not.

7 Ways segmentation can help you get more conversions

Now that you know what segmentation is and why it is important for your business, get to know ten ways in which segmentation can help you get more conversions. 

  1. Renouncing generic messaging

Segmentation allows businesses to come up with personalized experiences for their consumers. It helps eliminate generic messaging and lets each group of your consumers feel understood, heard, and seen by your business. This matters because consumers today expect highly personalized experiences. 80% of them tend to do business with a brand that employs personalization tactics across various marketing mediums.

For instance, women won’t prefer promotional messages that market men’s products, and men won’t appreciate it if you promote women’s products to them. So, adopt segmentation to refrain from sending a one-size-fits-all message to your entire base of consumers and prospects. 

  1. Improving your value proposition

A value proposition refers to the value a business promises to communicate and deliver to its consumers if they opt to purchase its product or service. When your value proposition addresses the need of your target consumer and demonstrates your superiority over your competitors, it attracts more customers and prospects. 

When you segment your audience, you can gain a better comprehension of each segment. This in turn will help you craft a powerful value proposition for each group. ITSMA, a firm specializing in B2B marketing strategy and development, found that 82% of B2Bs that created personas experienced an improvement in their value proposition. 

  1. Driving impulse buys

Segmentation acts not only as one of your best customer retention strategies but also as a major player in driving impulse buys. As mentioned under the “importance of segmentation” section, people make impulse buys when they are presented with a personalized message. 

For, with advanced segmentation, you’re able to assure consumers that you know them better than they know themselves. This eradicates some of their doubt in their purchase decision process. This makes them take a straight, comfortable leap into the sale step.

  1. Building successful websites

Your business’ website is one of your most important marketing collaterals. Segmenting your audience would enable you to tailor your website content to address particular segments. A study by HubSpot showed that with segmentation, businesses could build websites that are two to five times more efficient than those that provide generic content for all users.

Many online stores allow their customer segments to self-select the website content that best suits their needs. For instance, an apparel retailer has separate pages for kids’, women’s, and men’s clothing. By letting visitors choose the tab with the products they’re looking for, businesses keep unnecessary info out of the way, and thus, offer a more streamlined user experience. 

  1. Identifying best channels and best customers

Businesses can segment customers based on their acquisition cost or revenue contribution. This is possible as analytic tools provide them with data such as the customer lifetime value, average order value, and the number of purchases. This can aid in polishing your marketing strategies and increasing your revenue generation in the following two ways:

  • Recognize the best customer acquisition channels from where most of your revenue is generated. These are the areas you should focus the most on.
  • Identify your best customers. These are the ones with the highest lifetime value. That is, they make more purchases within the time they are customers. You need to put in more effort into acquiring more of them and increasing revenue generated per customer. 
  1. Lowering customer loss

If you have been in business for a while now, you probably would know that the cost of acquiring new customers is significantly more than retaining the existing ones. So, you need to direct efforts toward prevent customer churn. While there are plenty of reasons why customers would leave your business, one sure fire way to reduce their loss and retain them is customer segmentation. 

For, segmentation allows you to improve retention by helping you recognize customers who are at the risk of churn (those who haven’t purchased from you for a significant period of time). Once you identify this segment, you can target them with a retention campaign designed to win them back. This will help reduce customer loss. 

  1. Increasing sales

By segmenting your customers based on their online, especially onsite behavior, you’ll be able to increase sales with targeted messages. Following are the customer segments you should create for targeting with your well-crafted messages. 

  • Send messages to highly engaged visitors who haven’t purchased yet with personalized coupons for buying products in their favourite category. 
  • Target loyal customers who haven’t bought from you for a while with messages reminding them of what they most like about your brand. 
  • Updating customers who are on the verge of conversion with the latest product recommendations. 
  • Target high spenders with recommendations of your higher margin products in the category of their interest. 
  • Motivate bargain hunters to engage with products that have price drops. 
  • Customers who need to refill their stock. 
  • Send price drop alerts to customers who browsed a product that has dropped in price.
  • Update customers who searched for an out-of-stock product once it becomes available again. 

All these promotions will increase sales and gain you more conversions. 

Wrapping up

Your customers differ on a variety of grounds like demographics, geo-location, psychology, culture, and more. So, marketing to them with a one-size-fits-all messaging isn’t going to work, especially in this era of high technological advances. For, people prefer marketing messages that are tailored to their needs. 

This is why customer segmentation is no longer just a digital marketing trend but a necessity for businesses that seek to succeed. So, take enough time to go through your customer data to segment customers into meaningful groups and then cater to the needs of specific groups with highly relevant content. This will help attract their attention, identify different marketing channels that bring more customers, convert more buyers, retain more customers, make more sales, and generate more revenue.