2014-28-October-Alone-in-Bleachers.jpgAs mass marketing dwindles in popularity and effectiveness, the “segmentation of one” is the future. Businesses must be able to market to customers at an individual level to remain competitive and relevant. However, without customer analytics technologies -- such as modelling, forecasting and segmentation -- marketing to this degree of detail can’t be done efficiently.

Relevant and Timely

Let’s discuss the why, how and what behind marketing to the segment of one: 

  • Why market at this level?
  • How do you market to the segment of one?
  • What technologies and processes enable this type of marketing?

Why would an organization want to market at this level? Doesn’t it seem a bit creepy or intrusive? The numbers show that the opposite is true. Numerous studies have proven that this type of interactive marketing is more effective, has much higher success rates, costs less to execute and generates more revenue than mass offers.

Mass marketing over traditional channels usually has a success rate of about 3 to 5 percent. Event triggered marketing -- which executes an offer based on a trigger or behavior being performed -- has a success rate of 10 to 20 percent. Right time marketing to the segment of one -- using context, data and analytics -- comes in at a 40 percent success rate. Segmentation of one allows for the delivery of an offer that is hard to refuse. It is so appropriate, relevant and timely that any brand that can deliver at this level of granularity, should, as they will have much higher response rates to the marketing campaigns and programs that they run.

Performing correct segmentation allows marketers to deliver individualized, noninvasive customer communications. It’s important to make sure you’re making customers feel known and welcomed while also preserving their privacy.

Down to the Brass Tacks

How do you go about this? Think about an example where a brand could use this capability. Let’s say Joe Consumer sends a Twitter message to Retailer XYZ asking if a certain product is in stock. More than likely retailer XYZ will use the same channel to respond to Joe, providing him with an answer. But what if Joe prefers a response via a different channel, perhaps via a text message or phone call? Would Retailer XYZ have the information and software needed to do that? More than likely not.

What if retailer XYZ could identify Joe based on his social ID (Twitter handle) and it could tie other information in his profile seamlessly to this social ID -- data attributes such as basic customer information, demographic, purchase and transaction history, etc.? What if it also had contextual information -- such as digital data it collected when Joe logged onto its website and browsed the product and associated products?

Having all of this information won't make it possible for a brand to predict the future. But it could forecast propensities to purchase products and associated products, preferred channels (maybe Joe needs a reply via phone during a certain part of the day due to travel), and deliver offers in a timely manner that are much more likely to gain Joe’s attention than the wrong offer, a mass marketing offer or no offer at all. So you market to the segment of one by delivering the preferred offer over the preferred channel that is customized and even personalized down to the individual level -- taking into account ALL of the information you have about an individual consumer -- not just how they interacted with your brand most recently.

The next question is probably more tactical. “How do I achieve this level of granularity?” Three main things need to be in place as you start the journey towards marketing at this individual level.

Contextual data -- We have heard this before but I will stress it again -- collecting as much data as you can and housing it in one place is key. Collect data that you haven’t even considered collecting before, whether it's web data on your digital properties down to the keystroke or social commentary from your customers. Once you collect that, normalize it. Remove the noise and structure it so that a number of departments in the organization can make good use of the data. It's not a fun task, but it's a necessary one.

Analytics -- Once the data deed is done, next up is analyzing the data. Begin with simple analytics. Build a few propensity models. As you get more comfortable interpreting the results of your first models, add in a few more. Analytically based segmentation would also fall into this category. In other words meticulously dividing up your customer base into segments -- like groupings -- based on common data attributes. Finally, forecasting. Look at the past actions and history of your customer base to understand behaviors that might occur in the future. These are all analytical techniques to employ on your journey to individualized marketing.

Omnichannel capabilities -- Executing and tracking marketing messages is the final step here. Find an enterprise marketing software suite that works well for your organization and has the needed channel support (social, web, mobile) for your organization.

There you have it -- marketing to the segment of one in a nutshell. It may sound simple, but it requires that you connect with your end customer across all channels and points in time, seamlessly. Customers don’t care about channels as we marketers do -- so we must use data, predictive analytics and omnichannel capabilities as the three key enablers that will allow our organizations to succeed on this multichannel marketing journey. Marketing to the segment of one is not as far off as it seems -- so start prepping for it today.

Title image by Paul Friel (Flickr) via a CC BY 2.0 license