With Segments, How Small Is Too Small?
Will each of these four pay attention to your notification?
Market segmentation is one of the greatest innovations in marketing. Where before you had to put out the broadest possible message and hope for the best, now you can use data to pick out the many, many groups your customers belong to, whether it’s by location, by demographics, or by purchases. You can slice and dice your data so many different ways and pull out the tiniest segments and craft a message just for them. But should you?
How Segmented Is Over-segmented?
Much like the global push is a bit excessive in the opinion of many experts, you can take it too far the other way and narrow your audience down to excessively tiny groups that won’t make much of a difference. Sure, it’s neat to be able to pull a list of all the people who opted in for push notifications, who bought one specific product of yours, and who live in Chicago. But do you really need that level of granularity?
When looking at segments, start with your conversion rates. It’s true that the more personal and unique a message feels, the higher the conversion rate. But if you can get the same raw numbers from using a broader segment, or potentially much higher, that should influence some of your decisions. Why spend that much time for the same results?
Similarly, it’s worth looking at the time you’re investing. Crafting a narrow message to a small group can make sense if there’s a high rate of return. If you’re writing for a small audience that you absolutely know will click on your link, buy your product or otherwise engage with your actions, then it’s well worth every bit of effort you’re putting into it. If you’re not sure, or conversion rates argue against it, then perhaps you’re better off finding a broader segment.
You can carve up data any way you can imagine, but how useful is it?
What’s The Value?
Or, to take another tack, turn it around and ask yourself what the value is for the customers you’re contacting. Again, if this is a slam dunk for every last one of a small segment, if you’re selling a $500 product you know every last one of them will buy, then it’s likely worth the investment. But if they’re not going to click, then why spend the effort? If you’re not sure, ask yourself this: How likely would your target segment be to send this message to a friend?
Value is one way to avoid over-segmenting. Another approach is to ask yourself what other groups this small segment belongs to. No one customer belongs to only one segment, especially as you get granular. Take our Chicago example. If you were selling winterwear, your whole audience in and near the Windy City would be interested in your push, so why not write it for Chicagoans?
Segment marketing is brilliant, and even the smallest segments can help you understand your audience. If your winterwear is selling better in San Francisco than Chicago, that’s something you need to know. But segments are just a tool, and you don’t build a house with just one tool. Ready to see the power of segments in action? Sign up for a live demo of Pushnami!