The Death Of "Digital" Marketing & The Birth Of Something New - iMedia Connection Blog
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iMedia Connection Blog: The Death Of "Digital" Marketing & The Birth Of Something New
Building an Internet Strategy for Business in the Digital Age
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Twitter for Business, Marketing, Branding and Communication
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Guide to Online Segementation
Engaging Customers on Their Terms
Most experienced online marketers could probably write the curriculum at their local universitiesfor classes related to various strategies andtactics of online marketing. However, it seemsthat many online marketers tend to ignore the valuable lessons that database and direct marketers have learned over many years of practicingtheir craft. These traditional marketers know that marketing is, at its very core, about connecting with prospects and customers in a meaningful way—on the customer’s terms. The online marketer’s challenge is to makes sense of the vast information that traditional offline marketers could only dream of to connect and build relationships that benefit not only their organization, but also their visitors and customers.This guide will help you identify your key segments and, more importantly, provide youwith tools and knowledge to better manage those segments.So, how do you effectively develop relationshipswith thousands of individuals that come to your site? The truth is, while one-to-one marketing is a worthy goal—in many cases,it just isn’t practical. Just as the catalog or direct marketer looks at clusters codes, lifestyle overlays, the online marketer needs to create meaningful groups or segments that are significantas well as manageable. As an onlinemarketer you can then develop the marketing strategies and tactics that will strenghten your relationship and keep them interested in what you have to offer.Segmentation Benefits CustomersToday’s customers expect—no, they demand relevancy. If what you’re trying to communicate doesn’t connect with them and their issues in a split second, you’ve lost them. Knowing who your customers are and what they need is a requirement to compete in today’s competitive online world.Anticipating what they want and providing value at the right time, place and format is what is needed to win...What distinguishes online marketing from various forms of database marketingis the incredible wealth of data and the velocity at which everything moves. Consequently, businesses that are able to successfully measure,segment and digest thousands or even millions of customer transactionsin a fast and efficient way will a realize significant competitive advantage.The proper use of customer information and segments will benefit customerstoo. Customers should perceive the information and offers theyreceive from you as a benefit (if it's relevant) of having a relationship withyour company.How do you touch a customer’s life through segmentation and a database?There are many ways, some of them so simple that we may overlookthem. For example, when I visit Blockbuster.com, they greet me by name and more importantly provide me with recommendations based onmy previous selections and the scores I have given to movies. Personalizationis nice, but recommendations are valuable. Blockbuster is able to make these recommendations because of the data they have collectedabout me over time and through tracking my behavior.Not too long ago, I was shopping for light fixtures online. I even put anitem or two in my shopping cart, but decided to leave the site before placing the order. When I revisited the site a few days later I was offered adiscount on lighting fixtures and I was provided additional information ona new line of lighting fixtures that the store was now carrying. This was an unexpected benefit and made my shopping experience easier.Finally, the other day I received an email from an online women’s clothing store. It was a brief email from the department manager, reminding me of my wife’s upcoming birthday and it contained an offer to gift-wrap and send a dress by one of her favorite designers, in her favorite color and sizein time for her birthday. I snatched up the offer. This business is providing a valuable service for their customers and I bet it’s a very profitable one too. It made me glad to be in their database. And it was all made possible through customer intelligence and smart segmentation.When done well, segmentation and databasemarketing will make your customers feel content about having a relationship with you.As online marketers, we often think of optimizingour marketing investment simply in terms of yielding the highest results such as sales, orders,or some other success metric to the lowest commondenominator of everyone on the planet,thus gaining the biggest possible results. Overthe last few years—we’ve pushed every singlead, message, promotion, and new site designwe can think of to the entire world and we treatevery person as though they are the same person.For example, how often do we say in meetingsor to ourselves, “I found a new control!”“This new promotion, copy, call-to-action, orprice, etc., beat the old control by some statisticallysignificant percentage, thus our overallsales should increase proportionately.” Then we proceed to “roll it out” to the entire world.Let’s stop and think about this for a moment.What would happen if we could find the promotion, copy, call-to-action, or price thatwas relative and appropriate for every singlecustomer or visitor? WOW—Now that wouldbe a significant breakthrough! The right message,to the right person, at the right time, atthe right place—true one-to-one marketing!Right. Good Luck—but we may not be too faroff. (In reality, a combination of behavioral,psychographics and demographic targetingmay accomplish this. Discuss later.) What if wewere able to test all of our available marketingvariables across several key segments? Do we believe the yield would be greater than simplyoptimizing to the lowest common denominatorof everyone on the planet that hits our site? Many online marketers already do this without realizing it through online media or keyword buying. Let’s say that your marketing guidelinessay you can spend a specific amount perorder, per lead, per customer, etc. and then you proceed to test every online display placementor keyword that meets that criteria at a statistically significant (or least directionallysignificant) quantity.All of the placements or keywords that achieveyour metric are kept and all those that don’tare turned off. Hopefully this example is a gross under exaggeration of our efforts—promotions,copy, products, pricing, site design, all affec tthe ability of a particular keyword or placementto achieve the metrics—and hopefully many ofthese variables are tested exhaustively beforegiving up on promising placements before simply“shutting them off” because they don’t meet
Let’s circle back to the basics and receive a definitional hand from Wikipedia—the epitome of our online wikis. Wikipedia states the following about our topic: Market segmentation is the process in marketing of dividing a market into distinct subsets (segments) that behave in the same way or have similar needs. Because each segment is fairlyhomogeneous in their needs and attitudes, they are likely to respond similarly to a given marketing strategy. That is, they arelikely to have similar feelings and ideas about a marketing mixcomprised of a given product or service, sold at a given price,distributed in a certain way, and promoted in a certain way.… Small segments are often termed niche markets or specialty markets… The process of segmentation is distinct from targeting (choosingwhich segments to address) and positioning (designing an appropriatemarketing mix for each segment). The overall intent is to identify groups of similar customers and potential customers;to prioritise the groups to address; to understand their behavior(looks like our friends with a Queen’s English vocabulary got a hold of the latest and agreed upon definition—good for them);and to respond with appropriate marketing strategies that satisfythe different preferences of each chosen segment.Improved segmentation can lead to significantly improved marketing effectiveness. With the right segmentation, the right lists can be purchased, advertising results can be improved and customer satisfaction can be increased.Successful SegmentationWhat are the requirements for successful segmentation? It doesn’t matterif you want loyal, profitable, growth-oriented or (whatever your positivespin) segments, each of your segments should encompass the following:Similarities within the segment Differences between segments
Segments are measurable and identifiableSegments are accessible and actionable
Segment should be large enough to be profitableThese criteria can be summarized by the acronym ADAMS:
A Accessible: it must be possible to reach it efficiently
D Differential: it must respond differently to a different marketing mix
A Actionable: you must have a product for this segment
M Measurable: size and purchasing power can be measured
S Substantial: the segment has to be large and profitable enough
Source:Omniture Report on Online Segementation
Labels: customer segementation, digital, marketeer, online, segementation, strategy
