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Segmentation Is About to Get Interesting

2014-30-May-Halloween.jpgFor marketers willing to ask the question, “Who is my customer?” the response now comes as billions of data points. Few of these fit into the neat set of demographics that once defined marketing. It’s age, race, sex, weight, height, marital status, education level, politics, buying habits, household health worries, vacation dreams and much much more. Understanding this deluge of data — and the people or segments they represent — means a whole new way of understanding customers.

Segmenting is about to get a lot more interesting. 

“Knowing your customer will be the only source of competitive advantage in the future,” said Laura Ramos at Demandbase’s Marketing Innovation Summit for B2B this month in San Francisco. “We need to get past the [criteria of] size of company, geography and which industry they are in.” We’re now four years into what Forrester calls the Age of the Customer, a putative 20-year business cycle when buyers hold unprecedented power over the purchasing process.

Customers are now self-serve. Empowered by the internet and access to global competition, customers are researching, comparing and choosing products long before they ever speak to the sellers themselves. Marketers must now assume roles once filled by sales. Rather than volleying messages to the masses to raise awareness, marketers are technologists who identify, find and target potential customers longer before (and after) a sale.

To gauge the pace of change, Gartner analyst Laura McLellan predicted CMOs will spend more on technology than CIOs within three years. Marketing concerns already touch almost half of all technology purchases, estimates Gartner. 

Pinpointing the Audience of One 

In the future, we may see the segment of one: a personalized buying experience for every individual, executed at the scale of billions. Already, companies like Little Rock, Arkansas-based Acxiom have built the world’s largest database of customer data offering profiles of more than 500 million people worldwide, including the majority of adults in the US, reported The New York Times. Acxiom process more than 50 trillion data “transactions” per year. It is able to “recognize consumers, remember their actions, classify their behaviors” and catalog each person with an average of 1,500 data points.

“The ultimate goal,” said Ramos, "is to give the individual exactly what they need and when they need it at that moment.” For businesses with a single buyer, that may be possible. But it’s a far more difficult proposition for B2B marketers who must sell to businesses and convince teams of decisions makers and implementers at large firms.

A new generation of marketing automation tools let companies systematically understand these powerful customers. There are two tiers of options: core platform providers such as Marketo, Eloqua, Adobe Marketing Cloud and others, as well as a growing constellation of specialized “apps” that integrate into these platforms.

The theme seems to be decentralization, said Scott Brinker, co-founder and CTO of ion interactive and creator of the blog Chief Marketing Technologist. The largest players are opening up their services as platforms for independent developers to plug into and build native services (think Apple’s App Store for enterprise software). The emerging ecosystem lets you not just create campaigns or track activity, but design and track the buyer's journey at every step with creative combinations of apps.

That’s also redefining segmentation, said Brinker. It’s now about asking the right questions, ones not even possible a few years ago, rather than producing a simple answer.

The biggest challenge for marketers is that they’ve never had this capability before,” said Brinker. “We’re rethinking what it means to segment the audience: on what characteristics and level of granularity. That’s really where the challenge is right now — the marketing part, not the technology.”

Segmentation will become ever more about behavior, personalization and active interaction with the customer. “Digital is less of a display, and more of a dialogue,” said Scott.

That’s where businesses like Demandbase and others are getting into the game. They have brought together massive B2B databases with the ability to segment, target and personalize in real time. Peter Isaacson, Demandbase’s Chief Marketing Officer, said his company is focused on linking the sales process (via CRMs such as Salesforce) with automated segmentation and personalization. Marketers will soon have the tools to identify leads in their funnel, segment them based on behavior and buying process stage, and then serve up targeted advertisements, documents, CTAs and other materials whether leads are online at the office, at home or on mobile devices.


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