Create a Bucket List
Another important feature of customer segmentation is the realization that different customer groups can not only have wildly different demographic and psychographic identities, but very often will have strikingly varying lifetime values. To the surprise of some, a customer segment with a with younger average age will very often have a higher lifetime value than a group far senior to them, despite having far less disposable income to spend today. This may be based solely on the fact that the younger customers have, simply by being younger, many more years of being a loyal customer ahead of them. Taking this into account, many brands' obsession with successfully penetrating the youth market should come as no surprise.
Now of course it's easy to miss the forest for the trees, as customer segmentation is simply a means to an end, not an end in itself. Once you have broken your customers or prospects down into segments, the trickier (and for those who are not data geeks) more fun part of the equation involves devising incentive and reward strategies for each segment, and creating compelling marketing messages and collateral that can be used to get the message out across the various marketing channels. Knowing your customers, this part is a lot easier, which brings me full circle back to my point from the top: Create a bucket list.
Who’s Your Data? is a blog that aims to disseminate thought-provoking tips and techniques involving the use of data and database marketing to direct marketing professionals. Why should you care? Because implementing data best practices has been shown to lift response rates, improve analytics and enhance overall customer experience. Reader participation is encouraged!
Rio Longacre is a Sales & Marketing Professional with more than 10 years of experience in the direct marketing trenches. He has worked closely with businesses across many different vertical markets, helping them effectively leverage the use of data, personalization technologies and tracking platforms. Longacre is currently employed as a Managing Consultant, Marketing, Sales & Service Consulting at Capgemini Consulting, a premier management consulting firm. He is based in the company's New York City office, which is located in Midtown Manhattan. He has also previously worked as an online media buyer and digital marketing strategist.
Email Longacre below, or you can follow him on Twitter at @RioLongacre. Any opinions expressed are his own.