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Customer Segmentation & Targeting in Digital Marketing

Customer Segmentation & Targeting in Digital Marketing
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  • 0:03 Television, Laptop,…
  • 0:34 Customer Segmentation…
  • 2:37 Factors for…
  • 3:56 Reaching Across…
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Lesson Transcript
Instructor: Beth Hendricks

Beth holds a master's degree in integrated marketing communications, and has worked in journalism and marketing throughout her career.

Knowing who your customers are and how to reach them is a critical component of marketing success. In this lesson, you'll learn customer segmentation and targeting best practices, how to reach customers on a myriad of devices, and how to measure your reach.

Television, Laptop, and Smartphone

Imagine you're sitting on your sofa, the television is on, your computer is on your lap, and your smartphone is lying beside you. You see a commercial for a product you'd like to check out and proceed to the company's website. While you're waiting for the page to load, you grab your smartphone and find the company on Facebook to give them a like. For marketers today, this is the reality of reaching consumers - being able to deliver a message across multiple platforms and understanding who is seeing that message and on which particular device.

Customer Segmentation and Targeting

Despite the ever-growing shift to a digital marketing focus, classic customer segmentation techniques have not gone out of style. By segmenting, or dividing customers into categories based on similarities, marketers are able to better focus their message, pricing, product research and development, and audience targeting.

Marketers can divide and target customers by demographics, lifestyle, behavior, and media use. Let's look at each of these more closely.

When marketers use demographics to segment customers, they focus on the inherent traits of a person, such as age, gender, ethnicity, and family size. If you're trying to market a new line of makeup, who is your best audience? Likely, the demographic group of women and teenage girls.

For marketers, lifestyle variables encompass consumer attitudes and behaviors, religious and political beliefs, likes and interests, income, and education level.

Marketers also use behavioral segmentation, which is based on user behaviors, such as shopping patterns, social media likes, brand loyalty, and benefit or value to the consumer. It can also encompass purchasing based on occasion - when a customer purchases or thinks of purchasing a particular product or service.

In addition, marketers look at media use. Marketers know that different types of media draw in different types of consumers at different times and at different frequencies. By targeting ads to specific types of media consumption (such as television, radio, and online), marketers can pinpoint their ideal audience. Media segmentation can also include social media sites, whose users run the gamut in demographics, lifestyle, and behavioral choices.

Today, with audiences using multiple digital platforms, segmenting consumers and prospects is a more challenging prospect. The digital takeover is requiring marketers to think outside the box and, often, look at fresh ways to target their audiences based on needs, expectations, and behaviors.

Factors for Segmentation Success

Now that you've looked at categories for segmentation by types and behaviors, how can you ensure the success of your segmentation efforts?

  1. First, establish clear goals for your segmentation plans. What are your business goals or objectives? Is it to raise awareness of your brand or sell products? Choose segmentation practices that match your goals and capabilities.

  2. Second, collect data. It's important to gather as much information and intelligence about your customers and prospects as possible. Use data and input from your business partners, experts, and existing customers, and also take a look at your competitors and their customer base. Combining internal sources and market research will give you a comprehensive overview from a variety of sources.

  3. Third, analyze and break down the data you've gathered. Is your goal is to grow your base of female shoppers? Set those parameters and then get to know that audience. If you want to increase the number of repeat customers you earn, look at existing customers and consider targeting them with a repeat purchase loyalty program, for example.

  4. Fourth and finally, test your segmentation. Has it been effective or ineffective? If it is not effective or if your objectives or target audiences have changed, it's time to take another look at your segmentation efforts and reconfigure them as necessary.

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