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Why Smart Companies Segment Customers and Increase Sales

Segment Customers for Bigger Marketing Bang

customer segmentationHow does the old song go? “You say potato, I say po-tah-to.” The point being, no two of us are quite alike. Not everyone has the same needs and wants.

“If you talk to them all the same, you undermine the power of your message,” said sales training expert Adrian Miller. A better plan? “Segment, and then design outreach strategies and communications that are most effective and resonate best with each segment.”

Small businesses can leverage everything they know about their customers by breaking them down by type and sending out tailored messages to each group. Segmentation can be a powerful tool, when driven by the right technology.

What constitutes a segment? Some common groupings include:

  • Geography. Customers in a particular location may be prime invitees for special events. Locals may be more apt to respond to a personal touch, a one-on-one connection that wouldn’t work with those further afield.
  • Content. In the most obvious sense, shoppers who buy only records likely won’t respond to a marketing message about books. What they buy can be a big signal as to what is worth your time to try and sell them.
  • State of the relationship. A customer visiting your site first time will require a different sort of follow-up as compared to a regular visitor, or one who drops by just once and don’t come back. By breaking them out, it’s possible to give each a more tailored message.
  • Spending. Common sense says that small businesses with limited marketing resources ought to target their messages first at those who spend the most.
  • Opt-in status: Those who have chosen to hear from you may be more receptive to what you have to say, and can be addressed with different content and a different tone as compared to those receive an unsolicited follow-up offering, for example.

How to break them out? Here’s where your Customer Relationship Management (CRM) system earns it stripes, not just by gathering behavioral data but by allowing you to break it all down into meaningful segments.

CRM refers both to a software type as well as to the business strategy driven by that software. It is designed to aggregate all customers into a single view, giving the business access to diverse demographic data that can easily be re-purposed for various business needs. A few popular products include, InfusionSoft, SalesNexus , BatchBook and CapsuleCRM.

The ability to segment is a key feature of CRM databases, which typically can be configured to organize customers and contacts according to a range of features. They can be grouped by class (customer, prospect, vendor), by geography, industry, frequency of purchasing and so on.

What you do with all this data will depend on the business needs. You may send different offerings to different groups, or you may single out a certain group for a particular communication. Segmentation may allow a business owner to position a particular product in a particular way depending on demographic, or to plan entirely customized campaigns.

All this starts with segmentation. Target your marketing toward the appropriate individuals, and everyone wins: Shoppers have a better chance of finding what they need, while small-business owners get the most out of their lean marketing budgets.



RAMON RAY is Small Business Evangelist, Infusionsoft and Technology Evangelist, He is passionate about helping small businesses grow their businesses by educating them about technology and marketing best practices. Ramon is a best selling author, journalist and free lance writer, event producer, speakerand emcee. Ramon's third book is best seller “Facebook Guide to Small Business Marketing”. Ramon has shared the stage with Seth Godin, Daymond John, Guy Kawasaki, Simon Sinek, JJ Ramberg, Peter Shankman and other celebrity entrepreneurs. He interviewed President Obama in the President's first live Google Hangout. Ramon is not just an ivory tower geek, but as a former technology consultant has hands on experience in a variety of technologies including social media, mobile computing, computer networks, online software and more. Ramon’s expertise is technology, marketing and sales (personal branding, networking, business growth). Over his extensive career Ramon has written thousands of articles, spoken to thousands of business owners and impacted hundreds of thousands of small businesses to help their businesses thrive, using technology. Invite Ramon to speak at your next event.