A Quick Guide to Online User Segmentation

When conducting your marketing efforts, the first thing you need to focus on is customer or user segmentation.

Why? Because it defines all of your future efforts and helps you determine if you are achieving a return on your investment (ROI) and indicates the success of your campaigns.

But first let’s explain what user segmentation is.

What Is User Segmentation?

Segmentation is a kind of division. You divide or categorize your users, customers, buyers, readers…etc into groups. These groups are called segments.

By understanding the different categories of your users, you can then take the next step which is to target them.

How to Use User Segmentation?

People are naturally different, even people in the same age range can act differently or have varying interests.

In other words, it won’t be fair to you or your marketing budget if you target people aged 15 to 60 at the same time.

This also applies if you try targeting males aged 18 to 25 from the Middle East and North America. Yes, their ages are close but their interests are far and wide.

Types of Segmentation

To divide your target audience, you need to understand the types of segmentation you can use.

You can segment your audience based on:

  • Demographics: This involves dividing users based on their language, age, and gender.
  • Geographic: This is where you segment customers based on location, whether it’s continent, country, city, or even a specific neighborhood.
  • Psychographics: The division is based on habits; this is the ‘why’ behind your users’ buying decisions.
  • Behavior: Here you segment customers based on their behaviors such as how they act and what they do. It’s the ‘what’ behind their decisions. This is section is also known as interests.
Lesser Known Types of User Segmentation

There are three more types of segmentation that are often forgotten or not focused on. They primarily rely on what you as a business offer and to whom.

These are:

  • Firmographic segmentation: This is used in B2B marketing; that’s when your target customers are other businesses.
  • Cultural segmentation:  Understanding your customers’ culture can also help you in your targeting. It offers some insight on how customers of a certain culture make their decisions.
  • Occasional segmentation: This is a form of seasonal segmentation where certain words, terms, or products appear at certain times of the year versus others.

“This [occasional] segmentation focuses on specific events that are completely independent of the customer. It divides the market into categories based on the various occasions when the customer plans to buy the product, actually buys the product or uses the product,” explains marketing strategist Paul Shepherd.

He goes on to say that occasional segmentation can be further sub-divided into:

  • Universal occasions
  • Regular personal occasions
  • Rare personal occasions

Understanding Your Users via Segmentation

By segmenting your customers into groups, whether through one or more of the above options, you can begin to create a clear picture of who you are talking to.

According to data compiled by Accenture, around 81% of consumers wish brands understood them better, knew when to approach them and when not to.

Moreover, roughly 66% of marketers “struggle to personalize content in real time,” says Adobe, which adds that 77% of marketers “believe real-time personalization is crucial.”

This means that the better you segment your customers or users, the better you can target them through ads and content.

Creating a Segmentation Strategy

Last but not least, when you’ve understood the various types of segmentation, it’s time to move on to creating your customer segmentation strategy and use it to drive better sales.

Facebook Custom Audiences: A Short and Easy Guide

It’s common knowledge that Facebook ads are one of the most widely-used social media ads in the world. Businesses swear by them, especially when they get their Facebook Custom Audiences done right early on.

This shouldn’t come as a surprise, considering that the social media platform 2.6 billion active monthly users by the end of the first quarter of 2020, making it largest social network globally, according to Statista.

Facebook Advertising

Facebook offers businesses and individuals alike a wide array of advertising options. Whether you’re targeting clicks, traffic, awareness, subscribers, or selling as an e-commerce store, there’s something that Facebook can help you with.

One of the top benefits to using Facebook advertising is its wide-ranging targeting options, which offer filters that help brands, companies, and e-commerce stores to reach relevant audiences with their products and messages.

Facebook ads allow advertisers to reach those customers who are more likely to respond to your ad. For example, if you want to get clicks to a blog post on your website, Facebook allows you to target people are more likely to click on links instead of those who don’t click.

But to advertise correctly, you need to be aware of the different audiences Facebook works with. This is exactly what we will be covering in this series of articles.

Types of audiences on Facebook

Facebook Custom Audiences

Facebook describes its custom audiences as “an ad targeting option that lets you find your existing audiences among people who are on Facebook.”

How? You upload resources like customer lists, website traffic, app traffic, or engagement on the social platform to create those audiences.

A Facebook Custom Audiences is an audience you’re already aware of and who are familiar with your business.

This custom audience is created from information you, as a business, have collected, which may include: e-mail addresses, phone numbers, addresses…etc.

Benefits of Facebook Custom Audiences

“Custom Audiences are one of the most highly-targeted forms of marketing, making them increasingly popular with ecommerce stores who want to keep their brand top-of-mind with interested consumers,” explains BigCommerce.com.

It adds that Facebook’s Custom Audiences allow stores to target “contextual advertisements directly at consumers” who recently visited those brands’ websites. This attracts people better as the products are “still fresh in their minds.”

When was the last time you visited an e-commerce store’s website only to find the products you’d been considering – or even added to your cart – showing up again on Facebook? That’s part of Facebook Custom Audiences and re-targeting.

Facebook Custom Audience Options

The social network allows you to create several types of Custom Audiences. These are:

  • Website Custom Audiences (based on traffic and data from your website)
  • Mobile app Custom Audiences (based on traffic, data, and actions from your mobile app)
  • Custom Audiences using a customer list
  • Engagement Custom Audiences

According to Facebook, each ad account can create up to 500 Custom Audiences.

Ideas for using Facebook Custom Audiences

Sometimes customers may go through an e-commerce store only to leave or forget about their shopping carts. But with Facebook Custom Audiences, you can target those audiences once more, reminding them of their searches but in a different environment.

This allows you to test different ad messages and see which converts better.

Sometimes users truly do forget what that they had a shopping cart somewhere. By creating a kind-of-reminder with a limited-time offer, you’ll be able to attract them to your store once more and to completing their purchase.

But that shouldn’t be your end target. It’s important to analyze the ads you create and see which gets the best response on Facebook.  

In addition, using Facebook Custom Audiences, brands can even do micro-targeting. This allows them to target users who visited specific pages on their website.

Last tip!

The secret to creating any good audience is to have a customer segmentation strategy that helps you understand your customers and their behaviors.

How to Create a Customer Segmentation Strategy and Boost Sales

Every business, big or small, needs a customer segmentation strategy to better target their customers and increase revenues. Using this strategy, companies will then be able to better understand their customers and their needs.geo

To do that, let’s first define what customer segmentation is.

As its name suggests, customer segmentation means dividing your customers into segments or rather into groups. You define these groups based on factors relevant to your business and its audience.

These segments or groups can be created based on demographics, that is age, country, region or city, gender, level of education, or based on language, or even on interests and personal preferences.

What is a customer segmentation strategy?

This is where you use customer segmentation to form a plan that your business will use and rely on to define your target audience and customers and to generate better results and revenues.

We will take the geographical location option as an example to formulate your customer segmentation strategy.

Broadly speaking, there are 4 main ways to group your customers into segments.

Part of your customer segmentation strategy is to determine which of the following four options you want to use. You can, of course, mix them up to narrow down your target customers. But we will get into that later.

The main types of customer segmentation rely on:

  • Demographics
  • Psychographics
  • Geography
  • Behavior

By using a customer segmentation strategy, you are able to define your audience and consequently direct your marketing efforts in the right places. You are also able to understand your customers and their needs, and achieve your business objectives by fulfilling those needs.

Customer segmentation strategy 101

As mentioned, there are four main branches of customer segmentation. Why do you need them? Because when you are creating a strategy, even if your product can be bought by everyone, you cannot target everyone all at once.

So, let’s delve deeper into each of the abovementioned customer segmentation options.

  1. Demographics

Demographics is a large field but it covers a wide range of options that you can use to divide your target customers. Demographics entail information about customers’ age, gender, race, ethnicity, income, education, marital status, and employment.

According to Instapage.com, by using demographic segmentation, companies “reduce the risk of running campaigns to uninterested consumers, which quickly increases return on investment (ROI).”

Moreover, a Harvard Business study indicates that around 85% of 30,000 new product launches in the United States fail because of poor segmentation.

You may find that one or more of the items on this list is not be feasible for your business and strategy, and that’s ok. You pick the aspects that are in line with your business and use them.

  • Psychographics

HubSpot best describes psychographics as a kind of demographics. “Psychographic information might be your buyer’s habits, hobbies, spending habits and values. Demographics explain “who” your buyer is, while psychographics explain “why” they buy.”

Like demographics, psychographics involve a list of options and categories, namely: lifestyle, social class, attitude, beliefs, personality traits, activities, and interests.

“Psychographics gives marketers greater leverage in influencing conversions. For example, demographic information might tell you something about a person’s age, but psychographic information will tell you that the person is just starting a family and is in the market for baby products,” explains HubSpot.

  • Geography

Another aspect of your customer segmentation strategy should be geographical location. Here, you can divide your customers based on regions, countries, or narrow it down to cities or even towns depending on what your business does and its target audience.

By understanding where your target customers are, you can zero in on them, address their pain points and offer your solution. With geographical segmentation, you can understand and address your customers’ varying needs based on location, country, or city.

For example, if you want to sell a product to people living in hot countries, you can look at countries in the Gulf region where temperature exceed 40 Celsius in summer.

Another term for geographical segmentation is geomarketing or georargeting

  • Behavior

While demographics show who your customers are, psychographics show how they buy, and geography indicates where they are, behavior is about what they do regularly.

How do your customers act? What do they do? How do they take their decisions when buying a product or service?

All of these questions and more are part of your behavioral segmentation strategy. Compile a list of interests and behaviors to decide which target audience or which target buyer persona is the best fit for your product or service.

For example, if you are selling men’s perfumes, you can target the behavior of men who regularly buy perfumes or the women who buy perfumes for their partners or husbands on days like Valentine’s Day.  

A bonus to your Customer segmentation strategy

We said there are 4 main branches to segmenting your customers. But what if there’s a fifth?

This fifth option is basically combining the above 4 points. In other words, segmenting your customers based on demographics, psychographics, geography, and behavior all at the same time.

This narrows down your target customers to a great extent. It literally segments them into much smaller groups that you can easily navigate and work with.

Let’s say you have a product that is used by millions of people, these people are not all located in the same place in the same age range, or with the same interests and behaviors. By combining the 4 segmentation branches, you are able to target customers much better and in a more detailed fashion.

Customer segmentation strategy in action

Let’s say your business operates in luxury retail and you want to expand to a new market in the Middle East and North Africa (MENA) region. There are general notes that you have heard and compiled, like the need to target markets in the Gulf region.

But you have also heard that a country like Egypt has 100 million people. So, what do you do?

This is where your customer segmentation strategy comes in, clears the confusion, delivers the data, and helps you implement your expansion plans.

If you are an online business, you can target people who own a BMW or, depending on how luxurious your products are, you might prefer to target people who own a Maserati.

Almost there with your customer segmentation strategy

Now that you know how to segment your customers, there are a few steps that you need to perform as part of your customer segmentation strategy. These are:

  1. Analyze and understand your customers
  2. Create buyer personas
  3. Identify market opportunities
  4. Research other segments and opportunities
  5. A/B Testing

First: You need to analyze your target customers and understand them. If you are a brick-and-mortar business, don’t fret, Converted-In’s tools will help you understand your audience and what they like and dislike.

Second: You need to create buyer persona for your business’s ideal customer(s). With analysis ready, the buyer persona will already be clear in your mind. This step will help you decide who you want to attract to your business.

Third: At this stage, you want to look for opportunities based on your customers and segmentation so you can show these customers how your brand or business solves their problems. Ask questions like: ‘What are the ideal customer’s problems?’ ‘How does my brand solve them?’ And once you have your answers, go back to your persona and ask more questions like ‘Which customer segments aren’t getting enough (products)?’ ‘What other segments can I target?’ 

Fourth: This section is for when you discover new segments in your target market, based on your analysis and opportunities. Is the competition in this potentially new segment? What are they doing? What are they missing?

Fifth: A/B testing. You need to test the data you have uncovered and see how the target audience responds to your marketing, whether online or offline.

Have you filled all the above blanks based on your business data? Now you have a customer segmentation strategy. But it is hard work. That’s why using Converted-In’s consumer analytics tools like in-store metrics and GEO and demographics tools can bring your marketing efforts and customer segmentation strategy together.