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Audience segmentation — the beginner’s guide

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How to use audience segmentation to transform the way you understand and engage with your contacts

Audience segmentation is an intuitive marketing technique that involves identifying subgroups within your main target audience, with the intention of sending out more effective campaigns. After all, as with any marketing technique, a one-size-fits-all approach rarely factors in the individual wants and needs of your customers. As a result your message may get lost in the crowd.

Therefore, by segmenting your audience based on aspects such as their demographics, past behaviours or even their personality types, you can create messaging that is clearer because the specific target has been identified. All of which is designed to end wasteful or ineffective marketing strategies, that simply don’t align with your audience.

New to all things audience segmentation? You can schedule a demo of our Engage product at any time for free which features audience segmentation, in addition to a wide range of essential features to increase your engagement levels.

In the meantime, we’ve created this beginner’s guide to audience segmentation, which will give you a full rundown of what the practice is, and why it’s important along with our top tricks and tips on how to master audience segmentation like a pro.

Contents

  1. What is audience segmentation?
  2. Benefits of audience segmentation
  3. Challenges of audience segmentation
  4. Inspiration for segmenting your audience
  5. How to get started with segmenting your audience

What is audience segmentation?

What is audience segmentation?

Audience segmentation is the process of breaking down your audience into smaller sub-groups — primarily so you can understand and engage with them more effectively.

If you take a look at the above image, it helps to visualise audience segmentation. Similar to the contacts in our phones or on our social media accounts – not every person can be grouped in the same category in terms of how we would communicate with them, or even what we may mean to them.

So how come within marketing, it is so common to see brands using the same messaging and techniques for everyone, expecting the same consistent reaction?

Although your customers all share the common theme of being subscribed to your emails or in some way engaged with your brand – they are still unique entities. Hence, individual techniques are going to work better rather than grouping everyone together, especially in terms of how you approach marketing your products and services.

Instead, the key thing to note about segmenting your audience is that will help you make interactions with your contacts more effective. This means you can tailor messaging more precisely and avoid bombarding contacts unnecessarily.

After all, just like you, your subscribers will unsubscribe from your mailing list if your emails seem more ‘annoying’ than helpful or interesting, especially when your emails clutter up their inbox, and who can blame them?

However, by implementing audience segmentation, you can avoid many of the common pitfalls that occur when the connection between actual user needs versus applied marketing techniques are misaligned.

Audience segmentation and customer engagement

Audience segmentation has far more to offer in terms of building and maintaining customer engagement than first meets the eye. That’s because, while we may not freely admit it, as consumers we know that a personalised, carefully tailored message can be worthy of our attention, while a bland, unfocused message can lead to us instantly swiping to archive it.

As someone such as yourself who is responsible for customer engagement as a business, where do you start?

If you’re already segmenting your audience, it’s also likely you’re frustrated with something — perhaps it’s the quality of your data, or the existence of 500 random segments that were created by someone else in the business before you. But for those who are new to the concept, it can be difficult to know where to start.

Not to worry, as regardless of where you’re at with your audience segmentation, we’ll walk through:

  • Why you should be segmenting your audience.
  • Discuss some of the challenges marketing and customer engagement folks often face.
  • Help you understand the different methods of audience segmentation.
  • Show you how to use audience segmentation to totally transform your messaging strategy.

Let’s begin by identifying what audience segments may appear as depending on how your customers can best be distinguished from each other.

Types of audience segmentation – Audience segment examples

audience segmentation gosquared
  • Activity types
  • Attitudes
  • Beliefs
  • Buyer journey information
  • Engagement metrics
  • Ethnicity
  • Gender
  • Geographic location
  • Income
  • Language
  • Level of education
  • Personality types
  • Values

These are common audience segmentation examples, but as a business or even within a specific campaign, you may also have other segment types that can help you best understand your audience.

The goal here is to get away from the notion that all customers are the same (which they are not!) as this often results in ineffective messaging.

Instead segmentation involves categorising them on individual aspects – i.e. segments – which relate to how they will best respond to your products or services.

Free related resource: Turning visitors into customers.

Questions that audience segmentation can help you answer

segmenting an audience
  • How to stop people unsubscribing from my email list?
  • What are the best email marketing ideas?
  • What is customer centric marketing?
  • What is the best time to send an email campaign?
  • What is a good open rate for an email campaign?
  • What is audience analysis?
  • How to increase conversions on my website?

These are just a snapshot of some of the top insights you can learn through segmenting an audience. 

However, depending on the reasons behind why previous marketing campaigns have failed to hit the mark, you can concentrate your efforts on the areas you need more information on. 

Identifying any weak points within your marketing strategy is the best way to encourage successful campaigns in the future, and audience segmentation is one of the most effective data-driven tools at your disposal to help you achieve this aim. That’s because as we’ve established, segmentation is all about getting specific so that the outcome of your campaigns can be better predicted through carefully crafted, well-executed messaging and techniques.

How to segment an audience successfully – audience segmentation software

gosquared audience segmentation software

In order to segment an audience, specialist software and tools are required that will allow you to quickly identify the right prospects. Luckily for existing GoSquared users or anyone who has stumbled across this post, audience segmentation is a core aspect of our Engage solution.

Here is an explanation by GoSquared’s Russell Vaughan, on how our audience segmentation tool works, along with how it differs from other offerings on the market.

“A core belief of ours here at GoSquared is that more engagement doesn’t come through sending more emails. In fact, quite the opposite is true. There’s really good research out there that shows the more you communicate, especially if you end up overcommunicating with your contacts, your engagement will go down. So, people will do things like unsubscribe or mark you as spam, and then you’ll have no way to engage with them at all. Therefore, audience segmentation is what helps us send more focus but with less messaging.

When it comes to segmentation, we really believe that you should have more than two choices in how you segment your users. These often include how to find contacts that match all of the criteria you’re laying out or how to find criteria that match any of the other criteria that you’re matching up. This lack of segmentation depth raises a really big issue when we want to start factoring things in like engagement to our segments, because it’s a really basic requirement that we can find who was engaged versus who is engaged.”

Our segmentation methodology here at GoSquared allows you to go beyond the basics of how to segment an audience, so you can truly reach the right people with the right message, depending on the goals of your campaign. We believe that this added flexibility within segmentation is an essential component for success.

Benefits of audience segmentation

Audience segmentation might sound scientific and a little complex, but the benefits can dramatically outweigh the perceived challenges of setting it up.

Two of the top questions you may have include: Why is audience segmentation important? Along with: How can audience segmentation enhance your inbound marketing efforts?

In and of itself, segmenting your contacts into groups may not yield any results.

However, when you use your segments to drive more focused messaging, or to build analytics reports, you’ll soon find that audience segmentation allows you to uncover opportunities you never knew existed.

#1 – Your messaging will be more focused

Send a crafted message to each segment of your audience to boost engagement

By refining the set of people you send an email or message to, you can tailor your message much more carefully.

For example, if you’re announcing a new feature or product, you could send one message to everyone in your audience…

But in that audience, you likely have many different groups of people — people who love your brand, people who bought from you a long time ago who no longer even remember you, and perhaps even people who are recent customers but who had a bad experience with their purchase.

By communicating with all of these groups of people in the same way, you risk being bland or forgetful to some, while at worst you risk pushing unhappy customers further away from your business.

If instead you focus on a few key segments of your audience, you can refine your messaging to be much more engaging to each segment.

Going back to our example, it may be worth holding back on announcing your new feature to the segment of existing unhappy customers, and saving it for a later update. While you may wish to run a special promotion to re-engage your segment of older customers who haven’t purchased in a while.

The segment of customers who love your brand could be a perfect audience to help boost awareness of your new feature, so you could potentially even engage with them ahead of time to help with your feature launch.

Sending the right message to the right people can dramatically change the impact of an existing channel like email marketing — so think about your segments and your messaging together and you’ll soon see more success!

#2 – Get more valuable insights and build a better strategy

The more specific and focused your data is, the more capable your team can be in making decisions with it.

Audience segmentation allows you to access insights that may otherwise be invisible so you can truly rely on and use data to improve your marketing, product, sales, and customer success strategy.

Regardless of role, there are often opportunities to leverage data on a daily basis. It’s a huge, often underused, resource for all teams throughout your business. Audience segmentation gives you a unique opportunity to strengthen your understanding of your audience and customer base, and to develop a more detailed, more effective strategy.

#3 – Fewer emails, fewer messages, fewer interruptions for your audience

When using audience segmentation to drive your email marketing, the way you segment your audience can make everyone happier.

Nobody wants to be bombarded with unnecessary communication — we all receive far too many emails every day!

When your messaging is more targeted and focused around specific segments, the messages you send can be more engaging, but also the messages you don’t send can have a positive impact too.

Research states that any more than four emails a week can see engagement start to decrease significantly, so avoiding sending too many emails through smart segmentation can be a huge win.

What are the challenges with audience segmentation?

Your segments are only as strong as your data

With audience segmentation if your data is junk then your segments will not be reliable

Audience segmentation is only as strong as the data that defines those segments — so data quality is absolutely critical to a successful customer engagement strategy.

It can be really difficult to ensure your data is reliable and up-to-date. For demographic data, details like job title and company size can change frequently, while behavioural data, if tracked incorrectly, can be incredibly misleading when looking to find contacts based on their activity.

Part of the challenge with maintaining trustworthy data is that it often exists in many different silos throughout a business. Your CRM often has relevant information about a contact’s job title and recent purchasing interest. Your email marketing system may have data on open rates and click-through rates for your emails. And your product analytics tool might have valuable information about the activity of your online users.

But if these tools and data are all disconnected then it’s close to impossible to build segments of your audience that will help you successfully engage in a focused, meaningful way.

Centralising your data with a customer data platform can help you wrestle with these challenges and form a solid foundation to build your segments from.

Crafting more tailored messaging can take more time

What takes longer than writing an email? Writing three emails.

A significant trade-off with more focused messaging based on audience segments is that you will often want to craft messaging that is tailored to each segment to achieve your goals. So it’s not always a no-brainer to send out tailored messaging to different segments of your audience.

Based on the goal and the campaign, you may want to weigh up the cost (in terms of time) of crafting two, three, or more messages for each segment, and compare that to the potential value and impact you could see from that messaging having a positive impact.

The larger your audience, the more revenue at stake, and the size of your message can all be factors involved in making the decisions around segmentation and messaging.

You need to know which segments are relevant to your goal and your message

Combine the right message with the right audience segment for success

Pairing the right message with the right segment is critical.

Often, when businesses make mistakes with their customer engagement, it’s because they haven’t been clear on the goal of their campaign, and have mismatched the message with the audience.

To avoid making mistakes like these, it’s critical to think about the goal first. Even some of the most experience marketers and community managers skip this step every now and again, and it’s easy to miss in the haste to get a message out, or send an email.

Start with the goal, ensure it’s clear within the team, and use that to define the audience and the message you craft.

Ideas for how to segment your audience

Ideas for Audience Segmentation

The good news: There are infinite options for how to segment an audience.

The bad news: There are infinite options for how to segment an audience.

That’s why it can be difficult to know where to get started.

Starting with a blank page is often a challenging starting block to work from, so here are some ideas for segments you can create in your own business, based on our work with thousands of subscription businesses over the years.

Start simple

For a business focused on driving growth from the start of the customer lifecycle, a logical starting place is to segment your audience by the stage of the pipeline they’re at — sometimes called the status of the contact.

Where is the contact in their lifecycle? Are they a lead, a customer, or somewhere in between?

Ensuring the status of a lead is reliable, and up-to-date is a critical starting place for building more refined, focused segments on top.

If you’re sending existing customers messaging to encourage them to make their first purchase, or telling leads about their upcoming invoice, you’re going to run into all sorts of chaos.

So our recommendation is to get the basics working first, to start simple, and get more advanced from there. Don’t overcomplicate your segmentation in the early days.

Your best leads (who are not yet paying customers)

The chances are, your business wants more customers and more revenue — if it doesn’t then please get in touch. We’ve got questions for you.

If you’re already working to bring in leads or signups, then a huge are you can impact is increasing your conversion rate from lead to paying customer.

Often, businesses will treat all leads in the same way. But with the right approach, you can not only segment your leads from your customers, you can segment those who are most likely to convert, and those who are irrelevant.

With smarter segmentation you can ensure you spend your marketing and sales efforts more effectively — with a targeted approach to the leads more likely to convert, and save time and energy by streamlining how you approach those less relevant leads.

How might you build a segment of highly engaged leads?

Focus on a few key properties that matter to your business. For example, if you offer a software product (e.g. a SaaS offering), then you could build a segment with the following criteria:

  • Status: Lead
  • Position: Marketing Manager
  • Company Size: More than 10 employees
  • Lifetime Value: $0
  • Visits: More than 10
  • Viewed pricing: At least once

By combining behavioural analytics data and demographic data, you can build a highly targeted segment of leads who are relevant, more likely to buy, and fit with your ideal customer profile.

What’s more, you could use email automation to automate a personalised sequence of messages to these leads to encourage them to become customers at the perfect moment in their customer journey.

Your most active, engaged customers

Your active and engaged customers can be a great source of inspiration and ideas for making your service and products better. They can also be a valuable segment to help with marketing efforts, giving feedback, and sharing positive reviews with the wider world.

You may want to build a segment of your active, engaged customers, and encourage them to leave a review on an industry-focused review site to help you drive more awareness and ultimately to win more customers.

To achieve this, you’ll want to build a segment, send out your message, and follow up to see the results.

Your segment could look something like this:

  • Status: Customer
  • Monthly Recurring Revenue (MRR): Greater than £50
  • Visits: More than 50
  • Last Seen: Less than 5 days ago
  • Net Promoter Score: 9 or greater (Promoter)

With this segment defined, you can be confident your asking highly engaged, active, satisfied customers to share a review online, and dramatically reduce the chance you inadvertently ask any dissatisfied customers to share their feelings publicly!

People who rarely use your product anymore (but were once active)

It’s always frustrating when you see a customer cancel their subscription, but all businesses have to deal with churn at some stage.

Waiting for a customer to churn isn’t going to help — you want to reach out before they even contemplate cancelling if you want to have an impact on the outcome.

But as anyone who’s played the lottery will know, predicting the future isn’t easy.

We can use audience segmentation to find customers who might be showing early signs of being a churn risk — they might be exhibiting different behaviour to what you’d expect of a paying, happy, successful customer.

For a SaaS business you might build a segment with criteria like the following:

  • Status: Customer
  • Lifetime Value (LTV): Greater than 0
  • Visits: More than 30
  • Activated Key Feature X: Yes
  • Last Seen: More than 7 days ago

Your churned customers

Just because a customer cancelled their subscription, it doesn’t mean it’s all over.

It’s really important not to ignore these customers, or see them as a lost cause. Even a customer leaving your service is still on their customer journey with you — a good experience from start to finish can be the difference between a customer churning “for now” or “for ever”.

Critically, ensure whether you still have permission to contact your churned customers — if someone has cancelled and deleted their account with you, then it’s likely they have been quite adamant they don’t want to hear from your brand again unless they choose to come back off their own motivation.

If you do have permission to engage with churned customers — likely customers who cancelled their paid plan but perhaps still have an account, or still are subscribed to your newsletter — then you likely have an opportunity to win some of these people back.

You might define a segment with the following criteria:

  • Status: Cancelled
  • Lifetime Value (LTV): Greater than £500
  • Cancellation Date: More than 1 month ago

You might want to go more detailed with your segment — for instance, factoring in a reason for the customer to churn might help to be even more targeted with your messaging so you can re-engage them as effectively as possible.

Armed with a reliable, up-to-date segment of your churned customers you will be in a strong position to reach out and re-engage your past customers, giving you a great opportunity to win them back with thoughtful, carefully crafted messaging.

How to get started with segmenting your audience – Our top Audience segmentation tips for success

segmentation definition

Now you’re armed with the knowledge, and some inspiration, we hope you’re feeling ready to start segmenting your audience.

What you’ll need:

  • An audience to segment(!) — a list of contacts you have permission to engage with.
  • Accurate demographic data that’s fresh and up-to-date on each of your contacts.
  • Behavioural data that’s relevant to your business — ideally user analytics data from your website and/or product.
  • An easy-to-use tool to centralise your contacts and data and allow you to build segments.
  • A cup of tea to keep you going.

Thankfully, you’ve come to the right place if you’re looking to address these needs (apart from the tea) — GoSquared Engage will help you with all of the above, and we’re on hand to help you every step of the way.

If you want to start crafting messaging and campaigns around your segments, you might also want to check out our free course on customer engagement. There’s a spot waiting for you now!

Wondering how your customer engagement strategy stacks up? Take our quiz!


Audience segmentation FAQs

In order to provide you with the most helpful experience, we’ve answered some of the most common questions about audience segmentation below. 

Don’t see your query? Reach out to us at any time with any further questions, including if you’d like to know how our audience segmentation tool can help with your business goals specifically.

What does segmentation mean?

Similar to segments of an orange, segmentation means separating a whole concept (i.e. your entire customer base) into individual segments. So, instead of viewing your customers as a complete entity, you are instead targeting the focus of your products or campaigns onto a particular segment. 

What is segmentation in marketing?

Segmentation in marketing looks to break down a wide target audience into a specific type of customer, who is more likely to convert based on the approach of the campaign, or what user data suggests about the customer profile that is most likely to convert as just two common examples. 

Why is segmenting audiences important in marketing?

The core purpose of marketing is to create awareness about a brand along with its products and services. However, marketing in itself isn’t always cost-effective, especially if a broad rather than a focused approach is taken. Segmenting audiences helps narrow down the focus of a campaign, to ensure the message is received by those most likely to convert based on actual data. 

Which segment represents the highest value?

As there are endless ways of segmenting your audience, the data will need to be analysed to see who is currently most engaged with your products and services. This segment can be based on any number of factors from job title to age range, attitudes and values to geographic location among many more. Furthermore, if you sign up for our audience segmentation software here at GoSquared, we’ll be able to guide you more specifically, as every business will have varying answers when it comes to the highest value segment. 

How to segment a market

Segmenting a market comes down to the factors that distinguish your audience. These can then be used as a filter within a segmentation tool, allowing you to toggle between different segments to create more effective marketing campaigns.

Geographic segmentation definition 

Geographic segmentation is when your audience segment is based on the location of your users, whether this is a particular city, country or even continent. 

What is a target audience segment? 

A target audience segment is when your entire customer base is divided into key strands, depending on who would be most receptive to a particular product or campaign. 

Demographics definition – what is it?

Demographics encompasses all possible ways of describing a customer to get to know them better, and as a result, create better products and campaigns. A breakdown of a customer demographic could include everything from their age, gender, job title, typical salary, location and hobbies. In combination, demographics build a tangible picture about a particular set of people, such as customers of a business. 

Related audience engagement concepts to explore:

Written by
James is CEO and one of the co-founders of GoSquared. He also likes to talk about design.

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