What successful audience segmentation looks like
Audience segmentation is a complicated, but lucrative marketing endeavor. Here’s what successful audience segmentation looks like and how you can accomplish such a feat.
Audience segmentation is not just a way to describe the practice of dividing your audience into subgroups based on certain shared attributes, such as location or online activity—it is the best way to gain deep insights into your customers’ behavior. The buzz surrounding audience segmentation is warranted because it works.
Segmenting your customers enables you to tailor a marketing message to a specific audience—the holy grail of successful digital advertising. However, a major challenge is the absence of clear-cut metrics to measure the success of your efforts. Most marketers are discouraged by their initial campaigns and a dearth of exciting metrics, but there are subtle signals that can tell you whether or not your campaign is working. Here, we'll discuss three ways to measure success in your segmentation efforts, as well as common mistakes marketers make when reacting to the results of their campaigns.
1. Your target audience shrinks, but engagement grows
Segmenting your audience for its own sake has little intrinsic value. How does simply grouping healthcare professionals by specialty, for example, add value to your marketing campaign
While you can't assign an explicit dollar value to audience segmentation, you can measure its impact on how effectively your ad dollars are spent. For example, the marketing team for a new surgical device may want to increase adoption, but only by neurosurgeons in California who specialize in spinal cord injuries. An antiquated strategy would be to place an ad for the device in a neurology journal or publication—but then the marketers would be paying for impressions from readers outside of their target audience.
Therein lies the value of audience segmentation: You pay for fewer impressions than unsegmented campaigns, but you still reach your core audience. Segmenting enables you to target only the prospects who are most likely to engage with your ad. In this example, the medical device marketing team cares about only California-based neurosurgeons, so it saves money by not serving ad impressions to neurologists from New York. Proper segmentation can also increase engagement, because it allows you to tailor a specific message to your target audience.
A word of caution: The scope of your segments should strike a balance between broad attributes and specific characteristics. One stress test for your segmentation is to ask whether these groupings will succeed in future campaigns. The neurosurgical tool’s marketing team grouped customers by very specific geographic attributes to accomplish precise goals for their campaign, but this method will be insufficient if they want to reach a broader market—for example, neurosurgeons in North America.
2. Your segments constantly evolve
Another indicator of successful segmentation is whether the data from your segmented campaign enable you to formulate new, more specific audience segments. Ideally, each campaign will offer new audience insights that can help you tweak or rearrange your segments to make them more effective.
You may find that people who engaged with one campaign are more likely to engage with subsequent ones, for instance. With this information, our hypothetical marketing team can define new segments based on each neurosurgeon’s response to the ads, dividing its audience into those who submitted contact information, those who engaged with ads but did not sign up to be contacted, and those who ignored the ads completely.
These new attributes then empower the marketing team to distinguish between early adopters, cautious optimists, and conservative traditionalists, which will inform their future marketing efforts. A subsequent campaign may seek to target only early adopters when the device is still relatively unknown and focus on traditionalists only once the device has become more prevalent in the marketplace.
However, you must be moderate in your fine-tuning. Most marketers are afraid of tweaking segments too infrequently—they think their segments quickly become archaic measures that don’t reflect changes in their customers—but constantly tinkering with them is costly and obscures a clear picture of which customers should receive which marketing messages. How you address this problem is unique at the product and market level, so some segments need to be updated more frequently than others. Don’t ignore your segmentation completely, but don’t tinker with it too frequently, either.
3. Your data’s predictions match your results
Say the device marketing team wants to run another campaign and thinks its target audience—California-based neurosurgeons who are early adopters—responds best to email marketing. As a result, they place dozens of ads in eNewsletters and eTOCs, and bundle them with a few website banner ads. The campaign generates a record number of leads—but, surprisingly, website banner ads were responsible for almost all of them.
Should they consider this campaign a success? On the one hand, it generated a record number of leads. On the other, it directly contradicted their expected results.
Scenarios like this one often indicate a failure in the segmentation process; the results suggest that the marketers' groupings were wrong. In this case, the marketing team likely overlooked better explanatory attributes when it segmented customers. Maybe the optimal early-adopter segment was, in fact, California neurosurgeons who prefer website ads.
When you create segmented campaigns, the results should align with what your data predicted. This doesn’t mean you can’t be pleasantly surprised by the results of your campaign, but you need to make sure that your campaign was successful because it was segmented properly, not because of a fluke in design.
But be careful in ascribing too much authority to your data. Audience segmentation requires you to make judgments about which attributes are most important and reduces customers to these weighted statistics. The danger is that you view each customer as a sum of parts that represents, but does not equal, the whole. You might view as identical two neurosurgeons who work at the same Los Angeles hospital because you disregard “extraneous” attributes that make them distinctly different, such as their willingness to prescribe new medications or try new surgical tools. Each customer expects the buying experience to be uniquely tailored to them, so one customer might react completely differently to your ad from the way a superficially similar customer might. In short, your predictions and results should align, but account for errors caused by a human element.
Audience segmentation is a vital tool for more efficiently and effectively reaching your target audience, and healthcare marketers are beginning to realize its immense benefits. In fact, 88% of marketers reported seeing increased campaign performance when they personalized their ads, according to a survey from Demand Metric.
So, over to you: How do you plan to use audience segmentation to drive your marketing efforts?