A Napier Webinar: Segmentation Secrets: 9 Ways to Target the Right Audience

Do you struggle to target the right audiences with your campaigns? Or find it difficult to reach your target audience in the most impactful way?

Check out our on-demand ‘Segmentation Secrets: 9 Ways to Target the Right Audience’ webinar, as we explore 9 ways to identify the right audience for your next campaign and deliver better results with lower costs. We will share:

• Why segmentation is important
• When and where you should segment
• The 9 strategic segmentations you should use
• How to implement these segmentations
• What to do if you can’t segment an audience

Register to view our webinar on demand by clicking here, and why not get in touch to let us know if our insights helped you.

Napier Webinar: ‘Segmentation Secrets: 9 Ways to Target the Right Audience’ Transcript

Speakers: Mike Maynard

Hi, everyone, and welcome to the latest Napier webinar. Today we’re going to be talking about segmentation. And we’re going to discuss nine different ways to target the right audience. So what we’ll do is we’ll get on straightaway and we’ll start looking at, you know, some of the details around segmentation. So, I think one of the first things to say is that there’s lots of different ways to segment audiences. But really, the result of segmentation should be improved performance of your marketing campaigns. And so I personally like the quote, that I believe originally was from John Wanamaker. But it’s been attributed for lots of different people since, which is half the money I spend on advertising is wasted. The trouble is, I don’t know which half? Well, the answer is, is the money is not being wasted, because you’re doing the wrong thing, that money is being wasted. Because you’re showing the ad to the wrong people. I your segmentation isn’t very good. So hopefully, what we’ll do in this webinar is help you understand how to better segment your audiences, so that you don’t waste half your marketing budget. And actually, what you do is you send great ads, and you send them all to the right, the right people.

So I guess we need to look at how we’ve segmented this webinar today. So what we’re gonna do is initially do some very quick poll. To understand how you segment your audiences will then start we’ll talk about why segmentation is important. We’ll talk about when and where you should segment. The main part of the webinar is obviously the nine that’s segmentation. So you should always use, we’ll talk a little bit about how to implement the segmentation as we go through as well. Finally, we’ll cover what to do if you can’t segment an audience if you’ve got any questions, and I’d really encourage you to put them into the chat. So please do that as we go along. And then what I’ll do is I will cover those questions at the end of the webinar, we’ll aim to get this webinar done in about 25 minutes. So should be relatively short, which will leave us time for questions. So please do put anything in that pops into your head. So the first thing we’re going to do is we’re going to understand how you segment and I’m going to do that by basically setting up a poll.

So what I’ve done is I’ve launched a poll, I think you should see it in your interaction section. Please look at the poll and click on how you segment you know, do you segment by job title by market? Or do segment by behavior? Or do you just not segment at all so please do fill in and let us know how you segment and what I’ll do is I’ll just leave that poll running for about another 30 seconds just so that you can tell us how you segment. We still just got a couple of other people voting but I think we’re we’re pretty much there. And it’s interesting. Okay, I’ve closed the poll now. If we look at the results, hopefully you can now all see them. Most people are segmented by market or industry. Some people segment by job title some people segment by behavior. Nobody seems to be segmenting by company in terms of ABM. But the good news is is that everybody is segmenting. So that’s a good start. So everybody understands the importance of segmentation and they’re not just blasting out all their marketing materials to all of their customers on the list.

So, why is segmentation important? Well, I alluded to this earlier If you’re marketing to the wrong people, you’re basically throwing away money. So what you want to do is you want to be sending your marketing materials, your adverts and other content to people who buy. And that’s the right company, the right people in the company, ideally, companies that are in market, so people who are actually actively buying at the moment, rather than necessarily people who might buy in the future. And then most importantly, we need to send the right message to each segment. So you might have different messaging based on market based on persona, which were two of the things that were identified that oh, you might segment and have different messaging by company size, as an example. But basically, good segmentation means that our campaigns are more likely to succeed. So when should you segment? Well, I think it’s pretty obvious, you should always segment wherever you have an opportunity, you should actually focus down on the people who are gonna be really interested in your content.

So whether that’s through advertising, email marketing, running social campaigns, or indeed even going to trade shows, you know, you need to be thinking about how you segment and how you give a different experience to different people who have different requirements. And I think, you know, it’s always good to include a classic Dilbert cartoon here. And I think it’s important to make sure that you really think about segmentation. Unlike Dilbert, you don’t lump ratbert into the same segment that includes wild funghi. And penciller, raises, probably not a great segmentation. So you need to think about the right approach to do it. So what we’re going to do is we’re going to talk about nine different ways to segment audiences. And we’re going to look at ways that you can actually implement those segmentations as well. So the first one is firmographic, and demographics. So these classic segmentations, based upon, you know, who people are and who they work for. So, this could be on job title, and that job title could actually be seniority job role, you could also look at time at the company, you can look at industry and company size. So that might be targeting a particular industry vertical or a particular size of company.

So you might only want to target enterprise companies, or you might only want to target SMEs locations, obviously another important firmographic Segmentation as well. And then lastly, customer tearing is really important in terms of segmenting. So strategic importance of revenue potential based upon their demographics, and firmographic. So, what you’re trying to do is look at the data about the company. And from that elicit how good a customer they’re likely to be. There’s a number of different ways you can do this. But really the big player in the market is LinkedIn. If you’re doing campaigns based around, you know, companies that people work for, and their position within those companies, other than your own internal data, LinkedIn is probably the best source of information and a great platform to run campaigns. Another way to look at segmentation is behavioral based. I think one or two people mentioned, they were using behavioral based segmentation in the survey. So this can be things like activity based, if people come to your website and they look at certain pages, they show interest in certain product families, then you should send them content about those products and not about others. A very simple activity based segmentation. But you can also segment based on usage. So don’t forget you should be marketing, to customers that are already buying from you as well as prospects. And one interesting thing here is, you know, really good marketing campaigns around software as a service tools actually use the data that they get, where they understand what different customers are using the tool for. And then they market relative to that. And typically a SAS marketing campaign, very simply will aim to increase that range of features that customers use of their tools, because obviously, the larger number of features they use, the more sticky that tool is likely to be. And lastly, you can actually look at buying behavior, how people buy. And so that could be roles that individuals take during the buying process. If you’re involved in selling a small number of very high value products.

You might want to model what various customers do when they buy and then market to those specific individuals to reflect their role in the buying process. Typically a lot so you could be looking at the customer lifetime value, or the annual reoccurring revenue if you’re selling something that’s more subscription based like a service. So for example, some thought or system management, you can look at profitability. And I think that’s really important to remember that actual revenue doesn’t necessarily reflect profit. So it’s often more useful to actually segment based upon profit. And then lastly, length of relationship is hugely important. I’m not going to get into the economics of it. But typically, if you’re looking at relationships over multiple years, most companies will discount the value of future years. So that actually make that value slightly smaller, because you’ve got to wait for it. And so and also, potentially, it will be lower value anyway, because of inflation.

So the big calculation that you really want to look at when you’re thinking about this is your average order value, times the frequency of purchase, times the likelihood to retain a customer and that will give you a customer lifetime value. And ultimately, if you know the value of the customer, you know how much effort you want to put into them, to both retain them, and grow them as well as acquiring new customers that are similar. And so typically, with value based segmentation, you have a model for existing customers, that might generate a number of different groups. And then you’ll allocate prospects into those groups based upon their characteristics. technographic is very interesting, if you’re selling, particularly software, but also to a large extent if you’re selling engineering products as well. So the type of technology people use. And you can use this in a number of ways you can use this to identify opportunities, so where you have integrations with a particular technologies, or you can also use it to eliminate so if somebody you feel is locked into a competitor’s technology, there’s probably less value in you chasing them than someone who’s not locked in. And in some markets, it’s really, really important. So in particular, in the enterprise software market, it’s usually bought, if you want to sell, for example, marketing automation platforms, it’s really important to know what products the prospects are already using. Because you’ll have a different pitch and a different set of benefits depending upon where that prospect is.

And there are tools like built with that will give you really quite detailed information on some of the systems that are installed on companies websites. Our fifth one psychographic segmentation. That’s really understanding the decision maker. So it’s really a classic way to segment that. And to put this very simply, it’s all about building personas. So great personas, they don’t just talk about the person in terms of their demographics, how old they are, what their job title is, things like that. And they really look into what the challenges are in that person’s role, how they feel they progress in their job role, how they get recognized. And, you know, really helped you understand what how that persona is thinking, and what you can do to help them do a better job. So I would say if you’re using personas, that’s a great start on psychographic segmentation. But what we do a lot with clients is really enhance those personas, to get an understanding of what you as a vendor can do, to really make that person have an easier life, remove their challenges, or potentially get recognized for doing a great job and therefore potentially promoting them.

And you know, one of the great things in marketing is if you can offer a product that gets someone promoted, there’s a lot of incentive for that customer to then buy it. Related to psychographic segmentation is data driven segmentation. And so there’s lots of algorithms that will generate clusters of your customers based on certain characteristics. And this is different because what you’re not doing is working from trying to understand the customer. And then build the segmentation. What you’re trying to do is you’re trying to gather data, and then just let the machine crunch the data and see where it can see groups. And sometimes these groups are fairly obvious. And sometimes it can be unclear, you know, why groups both behave in different ways. You’ve got to be careful that there’s no spurious correlation in here. But it’s often very useful to be able to do some data driven segmentation. And then you can test you know, messages and benefits on a small sample of each segment. And understand what the optimal messages even if you don’t understand why that segment has been created by the computer. If they all behave the same, they’re probably all going to respond similarly to the same messages.

Customer Journey segmentation, I think here’s something that is often very underrated. And it’s because it’s often hard to understand where people are in their customer journey. And we often hear of, you know, top of the funnel, middle of the funnel bottom of the funnel content, which is very simple journey segmentation. But the more granular you can get, the more your campaigns will perform better, because you can really address where people are, and what you’ve got to do to move them to the next step. It is difficult, it does require, you know, building of customer journey models, and understanding you know where customers are, and what micro journeys they’re taking to take them from one point to another. So often, we do see people just reverting back to top of the funnel, middle of the funnel and bottom of the funnel. And alarming frequency, top of the funnel, middle of the funnel and bottom of funnel refers to content, and not to segmentation. So I really say you know, one of the things when you’re generating content that’s targeting people at different customer journey stages, try and get it in front of people who are at that journey stage.

Rather than just throwing out top of the funnel content, everybody you can find and assume everybody you know, is really just at that early awareness stage. Whereas the reality is there will be people further down that journey in the general population. Our penultimate one is needs based segmentation. There’s a classic theory called jobs to be done theory. And Put very simply, what it says is customers don’t buy products, they buy a solution. So that effectively and the academic language is hiring products to solve a problem. So as an example, people don’t buy a drill, what they’re buying is the ability to create holes is the classic example there. And that can be quite interesting, because you can actually find that there are customers that maybe would have been separate segments actually come together when you look at needs based segmentation. So sometimes it can be an interesting way to look differently, how you segments, different audiences. The last one, and any of our clients are on the call will not be surprised at this, because we talk a lot about it is Account Based Marketing. And this basically means that each customer is a segment. And so that allows you to be very personalized in your communication. It allows you to really understand each individual customer. And it’s generally speaking one of the most popular segmentation approaches for b2b today. Interestingly, nobody’s actually doing it, who responded to the poll earlier as their primary means of segmentation. But it’s certainly one of the most effective, which is really driving its popularity. If you’ve been on one of these presentations before, you’ll know that we always like to give a bonus idea. So what you can do is you can actually look at interest based segmentation.

And a classic example is PR. So what you do is you target people who are interested in particular topics, based upon the publications they’re reading. So people who are really into concrete, probably read concrete, you know, it’s a fairly obvious thing to do. But equally, you know, design engineers will generally read slightly different mix of publications, for the publication’s read by senior managers, electronics companies. So, interest based segmentation, it’s an easy way to do it, it’s a great way to a great approach to use with PR, most of the other segmentations are very difficult to use with PR, which tends to be a very broad approach. But you know, it’s maybe not the best if you’re working on your own data. So what do you do if you can’t segment an audience? And so quite often, we have clients coming to us saying, well, we’ve got data, but we really don’t know how to segment it. We’ve got very little information about any one contact. You know, a lot of contacts, we just have the name and email address, what do we do? And, you know, the first thing to do is start gathering data. So think about the future. It’s very much a case of being like the Chinese proverb, The best time to plant a tree is 20 years ago, the next best time is today.

So if you haven’t been building the data in your database, to profile prospects and contacts, and allow yourself to segment, then start today is really important. And generally speaking, progressive profiling, where you engage people and where they see a form, you will autofill the data you have, and then you’ll ask them questions about data that you don’t have on them. That’s an incredibly effective way to grow the profiling of contacts in your database. Third party databases are also very useful. LinkedIn is incredibly useful for pulling data about people’s job titles, for example. And there’s lots of third party databases that offer data sources that are pulled from LinkedIn and other places that let you enrich data. So you know, one thing we do at Napier is we have a third party database we use to enrich data, and we use it on our CRM system. And the reason we use it our CRM system is it saves people typing. So if you just enter an email address for a contact, then the system will populate that contact with as much information as it can get hold off. And that can be very useful to help salespeople speed up the process. I’d certainly recommend building models and building customer journeys. And I definitely recommend testing.

So build some segments, make some hypotheses about what they care about, and test to see if you’re right or not. Because you know, the one thing about segmentation is, if you’ve got the data, you can actually split your database into different segments, but then your hypothesis about what they care about maybe right or maybe wrong. So testing is really important. And that whole part of the segmentation process. So in terms of key takeaways, obviously segment your data, that’s the first thing to say is, you know, don’t send everything to everyone, you’ll end up with a high level of unsubscribes. And also, you’ll really struggle to know what different parts of your audience are really interested in. There is no perfect way to segment and there’s lots of different approaches. Some of them are hard, some of them are easy, you know, don’t go for the hardest approaches, I would suggest starting off and segmenting in a more easy and simplistic way. And then gradually build as you enrich your data, keep testing different approaches and keep gathering data.

So that’s really our view on segmentation. I mean, hopefully out of the nine or 10 different ways I presented to look at segmentation, and split your audiences up, there’ll be a couple there that you can see, will really work with your clients. Sorry, with your customers. And if you’re interested, please do contact us. And we’re very happy to work with you. And help you you know, enrich your data, improve your segmentation, and ultimately increase the performance of your campaigns. So before I open it up for questions, just a little plug for our next webinar. Our next webinar is going to be on the 20th of August, same time. And it’s going to look at business to business advertising. And we’re going to look at how business to business advertising works. So this is going to be slightly different, it’s going to be focused very much on some theories about how advertising works. And hopefully it’s going to get you able to think a little more clearly when you start designing any kind of promotional copy, so that you can create adverts and content that actually is more effective. So if you’re able to do that, please scan the QR code, or go to the URL below. And we’d love to see you at the next webinar.

So thank you very much for listening. What I will do now is I’ll take a couple of questions.

Okay, so we’ve got a couple of questions from Carla, thank you very much, Carla. Nice to see you on the call. So the first one is if we had to choose between quantitative and qualitative, when your budget limited, which is more useful in b2b. So I’m not quite sure what you’re asking here. But I assume you’re asking about whether we’ve got quantitative data to segment or we’re trying some quality of data, you know, so, for example, where we think are going to be our top accounts, which tends to be quite qualitative. I think the answer is it depends very much on what you’re going to do. Both of them have their pros, both them have their cons and so to say, one is better than other will be wrong, generally speaking, the more mature and the bigger resource, so the better resource companies become, the more they can do quantitative segmentation, because they’re able to gather more data quite early on. You know, and particularly for small companies, it’s likely you don’t have a huge amount of data. It’s likely that data is not very deeply profiled.

And so saying you want to do really in depth quantitative segmentation, that’s wrong, because you don’t have the data to do it, it’s just going to be too hard. And you’re far better off doing a qualitative segmentation, where you look at a few things and decide, you know, this is how I’m going to split the database up. So I would say it’s probably more life cycle anything else in terms of company. But we use both we use both with companies of all sizes. And as I say, it’s about picking the thing that works, and the particularly picking the thing that works given your situation. And then we’ve got another question. What do we see as the differences between segmenting for b2b and b2c? I think the answer to that really comes down to decision making units or what Americans called buying committees.

So very crudely in consumer marketing. If you’re doing consumer marketing, you’re almost certainly marketing to women. Because women spend a lot more than men, they’re responsible for doing a lot more of the household purchases. And also, it’s no longer the case that men dominate a lot of what was traditionally seen as male purchases. So women actually make more decisions around buying cars than men do today, as an example, something that, you know, probably 40 years ago, it was seen as a male decision that’s now very female driven.

So you’re looking at fundamentally a person you’re targeting, and you’re looking typically at a female, if you look at b2b, although, you know, fortunately, things are getting better, there’s still quite a male skew towards purchasing a lot of industries, particularly the tech industry where a lot of you guys work, because it’s very engineering driven. And you’re also looking at a situation where no one person really makes a decision. There are people who might initiate the purchase, people who might influence the purchase, people who might make the decision and people who might place the order. And that is very different from b2c. Because you need to make sure you cover all of the people who can impact that decision.

Otherwise, it’s gonna be much harder for you to win the business. So I think that’s the biggest decision. And looking at that, I’ve got one other question. So somebody has asked me a question where they want to know about our database that we use for filling in data. So when people fill in data in our CRM system, we actually do a lookup on a product called Apollo. We’ve got no relationship with it. It’s not a naked product by any means. We have no partnership with them. But it’s one of the better databases for data enrichment, and it’s also very cost effective.

So that’s the tool we use. I know people have a lot of other tools that can be used for that competence. And there’s another one. So you know, there are lots of tools that allow you to do immediate lookups. But our particular tool is Apollo. So thank you for that question. Okay, we’re at the half an hour. I really appreciate your time. I hope we can see you all for the advertising webinar in August. If you do have any questions or anything you know, comes to mind after the webinar. Please do email me my email address Mike at Napier b2b dot com is on the slide. And I’d love to hear from you. And also if you’ve got ideas for future webinars, we’d love to hear that as well. So thank you very much. Thank you all for attending, and I hope you found it useful.