Micro-segmentation is a marketing strategy that uses data to identify the interests of specific individuals and influence their thoughts or actions. In an ideal world, we have all the data needed to answer our client’s questions. However, the ideal is not always our reality, so we need to determine new strategies for addressing client needs. Micro-segmentation allows for the grouping of consumers into more specific, focused audiences within the client’s segmentation and market — further placing relevance at the forefront and, in spite of limited client data, a micro-segmentation marketing strategy can be developed.
Here are four tips to get started with a micro-segmentation marketing strategy:
Establish base audiences:
You’ll first need to break up your customers into groups. You could start with your client’s established segmentation which may be defined by demographics. However, you can also establish base audiences on the following attributes:
- Geography: Country, region, population growth, density
- Demographics: Age, gender, education, income, presence of children, ethnicity, marital status
- Psychographic: Lifestyle, values, social class, personality
- Behavioral: Usage, loyalties, awareness, liking, purchase patterns, price sensitivity
Identify highly indexing variables within each base audience: Next, you should obtain in-depth highly indexing attributes for each base audience. Highly indexing variables can be identified through audience analytics within your preferred DMP or another data platform. These highly indexing variables allow for a more holistic understanding of each base audience and their potential subgroups, so that you can identify the distinguishing characteristics and translate these subgroups into micro-segments.
After examining highly indexing attributes, group them together (primarily psychographic and behavioral) to identify micro-segments). To ensure good coverage, you should create at least three to four micro-segments for each base audience.
For instance, Adults without Children may index highly for attributes associated with upscale travel and shopping, healthy living, national pride, and cultural arts and entertainment — leading to the development of the following micro-segments:
- Upscale Travelers & Shoppers: Consumers interested in upscale products and travel amenities with high discretionary budgets for travel and shopping
- Healthy Living: Consumers interested in healthy and green living as well as fitness and exercise (including ads and publications on these topics)
- All American: Consumers with American pride — veterans and current members of the military as well as "buy American" attitudinal purchasers
- Cultural Enthusiasts: Consumers interested in cultural arts and entertainment events
Allow for micro-segmentation overlap:
In some cases, you may have several base audiences that share the same highly indexing variables and, thus, the same micro-segments. For instance, the “Great Outdoors” micro-segment surfaced for Pre-K Families and Tween Families in addition to Grandparents. The “Great Outdoors” micro-segment contained consumers interested in outdoor activities, such as boating, hunting, fishing, camping, and hiking. While potential creative may differ for targeting this micro-segment within each of the base audiences, they each share the same core interest in the “Great Outdoors” and its associated activities.
Develop micro-segmentation targeting strategy:
Now, it’s time to put your micro-segmentation to work. At this point, you should be able to identify your most relevant segments, including: lifestyle, interests, attitudes, purchase behavior, buyer stage, and other attributes. For example, “Win It Big” Dreamers and Great Outdoors are two of the micro-segments that surfaced for the client’s Pre-K Families Core Audience. While the families in both micro-segments have Pre-K children, you could tailor messaging for these two Pre-K micro-segments that is significantly different from one other. “Win It Big” Dreamers could be attracted to sweepstakes and other contests that appeal to their interest in promotions and bonuses to get the best deal. In contrast, Great Outdoors, Pre-K families may be enticed by an emphasis on family-friendly experiences facilitated by the client’s product.
A micro-segmentation marketing strategy can allow for the layering of numerous data points — identifying a robust mosaic of hundreds or even thousands of micro-segments for more focused, relevant targeting. This kind of relevancy is key to people-based marketing, as it is centered on targeting your customers with more focused messaging. Micro-segmentation is one of the important ways that you can bring that relevancy to the forefront of your marketing strategy and, as shown, you can develop your micro-segmentation strategy regardless of client and data limitations.