Segmentation vs. personalization—can your marketing use both?

by | Oct 16, 2018 | Analysis, Public Relations

Good marketing is all about communication, and Millennials, many of whom are now approaching their 40s, have raised the bar for companies—research shows that today there’s a “strong and growing consumer desire for personalized expertise.” In other words, customers expect your brand to know what they need—generalized marketing will no longer drive sales. And to meet this demand, businesses need to integrate two key factors: segmentation and personalization.

Segmentation vs. personalization

Segmentation and personalization work together to make marketing more effective. First, segmentation offers a strategic way to break up your audience into large groups. It tells brands which individuals are likely to engage with their product and what the overall marketing landscape looks like and identifies consumer motivations. You need to segment the market in order to personalize your subsequent campaigns, but when it’s done correctly, segmentation is actually invisible to your customers.

Personalization, on the other hand, is the most visible part of any marketing campaign—it’s precisely the feature that buyers affix themselves to and what fuels their sense that your brand is the right one for them. Today, companies complete the personalization loop using CRM programs that track client details, such as past purchases and email interactions. Companies like MacroMator even offer Salesforce campaign management training and support so that brands can automate personalization—a process that would have been unimaginable just a few years ago.

Parlaying personalization into sales

Personalization isn’t just visible because it targets particular customer interests, but because it actually responds to individual actions. For example, cart abandonment emails may seem old-fashioned (and even annoying), but they can be that little nagging reminder that customers need to complete a purchase. In fact, according to the company CartStack, these emails can recover 15 percent of otherwise lost sales. These emails are a key supplement to more innovative personalization strategies.

Order confirmation emails are also a key player in the personalization process. These emails offer an opportunity to both upsell and cross-sell—companies that aggregate social data, for example, might opt to advertise products purchased or browsed by a buyer’s friends (cross-selling), rather than focusing on add-ons and accessories to recently purchased goods (upselling). This form of social pressure can be even more effective than traditional upselling practices.

Pairing marketing practices

Too often, segmentation and personalization are confused—or worst of all, they’re viewed as competing marketing practices. For example, some marketers mistakenly believe that personalization is such a detailed practice that it overrides the broader strokes of segmentation, but this isn’t the case at all. Segmentation tells you whether or not you should market to someone in the first place, and it helps establish specific life cycle streams for active customers. Personalization, however, is typically triggered by individual acts and needs to respond to the existing segmentation categories. This is not an either/or choice, but a both/and.

Just as we often cobble together a range of services and plug-ins to build a website and offer customers a variety of product options, in order to reach the broadest group of customers, we need to combine strategies. When segmentation, a background strategy, is paired with personalization, a triggered CRM practice, businesses see more sales. It all comes down to pairing the right practices so that your customers feel you’re speaking directly to their needs.

Larry Alton
Larry Alton is a freelance tech and computer writer