Blog > Articles

The Power of Segmentation (And Why You Need to Use It)

Posted by Sam Schrup | March 7, 2022

How do you reach the right people at the right time with your marketing messages?

It’s a tricky line that every business walks. You can spend a lot of money on a scattershot approach to marketing, where you blast out messaging widely in the hopes that you’ll net customers. You might have some success, but you’ll also have a lot of misses.

One way to get a better return for your marketing spend is to be more targeted about your messaging. Find the people who are the primary customers for the particular messaging you have and send out text messages, emails or other targeted campaigns just to them.

That’s the power of segmentation and a great reason for you to use this strategy with your own marketing efforts. Here’s how it works:

What is segmentation?

Segmentation is a practice used across all types of marketing activities. It involves dividing a customer base into groups based upon some common characteristics.

Some examples of market segments include:

  • Demographics
  • Interests
  • Needs
  • Priorities
  • Behaviors

The purpose of segmenting into customer groups is so you can target your marketing messaging and strategies around products or services most appealing to that group. For example, you might hone in on a key problem that particular segment has and devise marketing campaigns to highlight how you solve the problem.

What are the benefits of segmentation?

There are multiple benefits to segmenting your audience and your marketing messages. Here are some of them:

More powerful messaging

When companies attempt to appeal to everyone with their marketing messages, they often end up coming across as vague or generic. The result can be bland and dull for potential customers, running the risk that they appeal to very few.

On the other hand, segmentation allows you to carefully craft your messaging to appeal to that segment. It might be a particular problem they want to solve, or a strong need that they have. When you understand their characteristics and needs, your messaging will be much more relatable and effective.

Better ROI for ad spend

If you’ve delved into social media or PPC advertising, you’ve probably realized that you can end up spending a lot of money for mediocre results. One of the best ways to get a better return is to be careful about how those ads are targeted.

When you carefully define your audience and craft messaging just for them, your ads get shown to just people who meet your criteria. This helps you to have fewer wasted click throughs or impressions and better overall ROI.

Attract the right customers

Every business should have a clear idea of its ideal customers. They may be defined by key attributes such as demographics, interests, priorities or more, much like our earlier examples of potential market segments.

The overall idea is that you attract the people who are most likely to buy from you. Businesses can spend a lot of time on trying to nurture prospects who are never going to buy anyway - why do that when you could be focusing on those who are the most interested?

Identify niche markets

Segmentation can help you to uncover underserved needs or market niches. It may also help you to find new ways to serve an existing segment, based on their behaviors and priorities. This can potentially help you to gain a competitive advantage, by serving a need more effectively than competitors. You may even get new product development ideas.

Be clear about your messaging

When you identify exactly who your customers are, it helps you to define the messaging you want to get across. This helps you to be consistent across any channel you use to market. You will develop a clear voice and style of messaging that makes it simpler to create new campaigns.

Increase brand loyalty

Customers who receive targeted messaging feel understood. They’re more likely to feel that their needs are being met and that you truly “get” them. This is a great way to increase brand loyalty as customers will tend to come back based on how a company made them feel.

How to use segmentation in text marketing

If you’re ready to use segmentation for a text marketing audience, the place to start is always with the customer. Assuming you’ve established a known market need already, what problem are you solving for the customer? What desire are you fulfilling?

From there, you can establish a targeting strategy. Test out your strategy to see if you are reaching the audience you hoped, and make adjustments as needed, monitoring to see if they make a difference.

What can you use to measure your strategy? Here are some examples:

  • Click through rates
  • Conversion rates
  • Opt-out rates

Look at these measures and compare them against factors such as the content, cadence and timing of your messages. You can make small adjustments and measure to see whether they impact those metrics one way or another.

When it comes to targeting strategy for text messages, here are some examples of how to segment your audience:

By customer loyalty

Do you have a segment of customers who are frequent shoppers? This can be one segment to target specifically to thank them for their loyalty. When you generate more good will with your best customers, they’ll often become advocates of your business and refer their friends.

Some ideas for this segment include:

  • Special “loyalty discount” offers.
  • Referral program offers (“refer a friend and get $20 off your next purchase of $60 or more”).

Check out the example below from Universal Standard. Loyal shoppers on their text list are first to receive special offers, such as a “mystery box” of clothing sold at a heavily discounted price. Subscribers were sent a code via text message to access the offer.

By shopping behavior

You might sell a range of products that are suited to different segments of your text messaging list. One way to stay relevant is to segment that list by proven shopping behavior and sending offers that are related to what they have purchased before.

This can even be a strategy to gain upsells, subscriptions or related product sales. For example, if you know someone has purchased the standard model of a certain product, you might offer them a deluxe upgrade, or a product that is typically used with that product.

By lack of engagement

Most text marketing lists will have subscribers on them who haven’t engaged in a while. This can be a good segment to target with a re-engagement campaign to see if that gets them to buy.

Re-engagement campaigns can be quite simple, with messaging along the lines of: “we haven’t heard from you in a while - we have some new offers we think you might like.” Some businesses may like to use these as a means of purging their list of inactive subscribers, too. After all, you pay for the texts you send out!

By customer acquisition

How did the customer come to be on your text messaging list? This can be one way to send more personalized, relevant messages to them. For example: “It was great seeing you in our Sacramento store, check out our latest in-store events here.”

Final thoughts

Segmentation is a powerful tool for identifying target customers, then sending them messages that are more personalized and relevant. This brings multiple benefits to businesses, including better ROI and lower customer acquisition costs.

Text marketing is a channel that is perfect for following a segmentation strategy. Look at factors such as customer behaviors, preferences and demographics, then send messaging that is most likely to appeal to your chosen segment. People will tend to respond when the message is highly relevant to them.

Check out TextRetailer here for a powerful text marketing platform.

A Guide to SMS Marketing for Businesses

A 5-part email course on how to grow your conversions and boost your revenue through text marketing.

Thanks! We will send your first lesson shortly

Error sending please try again

Popular Posts