Getting to the segment of one

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As mass marketing becomes less common and effective, we get closer and closer to the ideal of the “segmentation of one,” which involves high degrees of personalization. In that environment, businesses must be able to market to customers at an individual level to remain competitive and relevant. However, without customer analytics technologies -- such as predictive modeling, data visualization, information management and segmentation -- marketing to this degree of detail can’t be done efficiently.

Let’s discuss the why, how and what lies behind marketing to the segment of one.

The Segment of One - It's All About You.

The Segment of One - It's All About You.

Why would an organization want to market at this level? Doesn’t it seem a bit creepy or intrusive? The numbers show that the opposite is true. Numerous studies have proven that this type of interactive marketing is more effective, has much higher success rates, costs less to execute and generates more revenue than mass offers.

Mass marketing over traditional channels usually has a success rate of about 3 to 5 percent. Event triggered marketing -- which executes an offer based on a trigger or behavior being performed -- has a success rate of 10 to 20 percent. Right time marketing to the segment of one -- using context, data and analytics -- comes in at a 40 percent success rate.

When done correctly, segmentation of one allows for the delivery of an offer that is hard to refuse. It is so appropriate, relevant and timely that any brand that can deliver at this level of granularity, should, as they will have much higher response rates to the marketing campaigns and programs that they run. Performing correct segmentation allows marketers to deliver individualized, noninvasive customer communications. In order to do that, it’s important to make sure you’re making customers feel known and welcomed while also preserving their privacy.

How do you go about this? Think about an example where a brand could use this capability. Let’s say Joe Consumer sends a tweet using Retailer XYZ's @twitter handle asking if a certain product is in stock. More than likely Retailer XYZ will respond to @joeconsumer via Twitter with an answer. But what if Joe prefers a response via a different channel, perhaps via a text message or phone call? Would Retailer XYZ have the information and software needed to do that? Often they would not, but that's changing.

Organizations are increasingly using customer analytics to make connections that enable higher degrees of personalization. Just imagine if Retailer XYZ could identify Joe based on his social ID (Twitter handle) and it could tie other information in his profile seamlessly to this social ID -- data attributes such as basic customer information, demographic, purchase and transaction history, etc.? In that same scenario, contextual information -- such as digital data it collected when Joe logged onto its website and browsed the product and associated products would provide richer, more relevant insights that improve how Retailer XYZ responds and even becomes proactive.

The segment of one is no longer as elusive as it may have once seemed because of customer analytics -- enabling organizations to cater to customers that are more empowered and connected than ever. They have access to information anywhere, any time – where to shop, what to buy, how much to pay, etc. That makes it increasingly important to predict how customers will behave when interacting with your organization, so you can respond accordingly.

And the deeper your understanding of customers' buying habits and lifestyle preferences, the more accurate your predictions of future buying behaviors will be. And the more successful you will be at marketing to a segment of one by delivering relevant offers that attract rather than alienate customers.


Editor's note:

This content from Jon originally appeared on CMS Wire as "Marketing to the Segment of One is Closer Than it Seems." One technological development that has enabled the Segment of One is big data - much of which is customer data.

Catalina Marketing has honed the use of customer analytics and big data for years to provide personalized coupon offers at retailer point-of-sale environments. You can get more details about the Catalina Marketing story in this blog post, titled How to manage the world’s longest grocery list.

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About Author

Jonathan Moran

Senior Product Marketing Manager

Senior Product Marketing Manager focusing on the SAS Customer Intelligence Solutions. Over 10 years experience in the Customer Intelligence industry. Very interested in the rise of social, the profitability of customers, and best practice retention strategies. Love talking sports, family, and music!

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