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How To Harness The Power Of CRM Segmentation

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In every small business, there’s a requirement to market the company without breaking the bank. Effective marketing means balancing the needs of your customers with the resources the business has, and leveraging all of the available data is a big part of that.

Image by My Blog Guest
Image by My Blog Guest

From small companies to massive multinations, segmentation is a common concept in marketing, and you’ll come across it repeatedly in most marketing jobs. Rather than blasting an entire customer base with the same message, marketers package contacts in a customer relationship management (CRM) system into groups – or segments – with common features. Then, they can market to each segment individually, safe in the knowledge that they are delivering a tailored message to each one.

Sure, segmentation is more effort than simply setting up a mail merge list, writing a single letter and carpet-bombing your entire contact list with it. But it could be the key to increased profitability. And, even better, it can help you make your existing funds go further.

Why Bother With Segmentation?

One of the biggest factors in any marketing campaign is return on investment (ROI). Marketing costs money. Billboards, TV ads, direct mail – even social media; they all have a cost, and they all consume resources that are precious in any business.

Segmentation helps you to balance your spend with measurable benefits, and it also helps you to reduce waste.

It’s important to note that not all segmentation projects are the same. There are various ways of dividing a database, and the way you segment will depend on your business type and your marketing objectives.

You might want to look into segmentation by:

  • Language
  • Amount spent in the last 6 months
  • Last interaction with the company
  • Last login
  • Size of organisation
  • Job role

There are some excellent examples over on the For Dummies website, too.

The key objective is to obtain meaningful segments that support your agreed aims for the marketing project. Don’t segment and then come up with a plan based on the segment; you might be making too many assumptions.

Finally, perhaps the most common aim is to focus marketing activity on the customers who are most likely to respond to your marketing activity. That means you might plough more money into customers who have spent in the last 12 months, but not in the last 6 months, seeing as those customers could easily be tempted back with a special offer. Don’t automatically market to your biggest spenders now. They’re already converted and don’t need another reason to buy.

Tweaking and Refining Based on Accurate Data

The one thing you need in segmentation projects is a decent handle on your customers. That means your CRM needs to be well maintained, and you should make an effort to collect more than just the basics. Customer addresses are fine in an address book, but what you need is actionable data to flesh out your CRM.

What do we mean by data? In short, whatever you can get. Data is usually gathered from sources like ticketing systems, loyalty programs, accounts and feedback gathered from real human beings. Only then will you truly understand what your customers need – and how you can position yourself to solve their problems.


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Sam Wright

Sam Wright is a journalist based in Norwich, Norfolk

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