Customer segmentation is a tenet of modern marketing. It allows marketers to interact with small, homogeneous groups of customers with messages that best resonate with each segment. Benefits include increased customer engagement, satisfaction, loyalty and lifetime value.
Customer segmentation based on demographic, behavioral and other indicators also provides invaluable information on the state of the business’s customer matrix. In today’s hyper-competitive market, segmentation is a practice companies can’t afford to do without.
The business case for investing in customer segmentation is straight forward and yet many marketers lack this capability. For the benefit of customer marketers who still aren’t using Optimove, we’ve developed Segmentor, a free advanced segmentation tool. Even though it provides only a fraction of Optimove’s segmentation capabilities (it’s free after all), this dynamic, RFM-based customer segmentation tool can lead marketers to actionable insights about their customer segments and indicate how best to communicate with each of them.
How it Works
After you’ve uploaded your customer data sample, Segmentor segments your customers into three lifecycle stages: New, Active and Churn. Lifecycle stages represent the different phases through which customers can move during their journey with your company. Lifecycle segmentation allows you to quickly understand your customer database at a high level.
Next, Segmentor uses cluster analysis to sub-divide each lifecycle stage into what we call segmentation layers. These layers group together the customers within each lifecycle stage who are similar to one another in terms of behavioral parameters, including spend level, activity frequency and lifetime value. Identifying homogeneous groups of customers based on their behavior is a powerful way to personalize customer communications for greatest impact.
For example, within the New lifecycle stage, Segmentor segments customers into distinct Longevity Clusters, Activity Clusters and joins the two into Customer Personas. Longevity Clusters allow you to address customers according to the length of time that they have been your customers. Activity Clusters are an RFM segmentation that groups customers according to their Recency (time since last activity), Frequency (periodic activity) and Monetary spend levels. Customer Persona clusters represent groups of customers based on the combination of the longevity and activity analyses. Customer Persona segmentation helps you discover, for instance, how many of your customers show top-tier activity for the first two weeks after registration.
Similarly, within the Active lifecycle stage, Segmentor generates Lifetime Value Clusters, Activity Clusters and Customers Personas. Within the Churn lifecycle stage, you receive a breakdown of your customers according to the time since their last activity, past activity frequency and spend levels, and customer personas based on the combination of recency and past activity analyses.
Actionable Insights
Examining your customers through Segmentor’s analysis can prove to be an eye-opening experience. You will gain a three-dimensional view of your customer base and uncover hidden clusters of customers that you can target with specific offers. You will be able to identify your VIPs, customers at risk of churn, new customers that have a high projected lifetime value, and so forth.
If you are still communicating with your customers in one dimension, or would like to give another go at segmenting your customer base, we invite you to give Segmentor a run. You will never look at your customers the same way again.
Try Segmentor Now!
Note that Segmentor only demonstrates the tip of the iceberg of Optimove’s segmentation capabilities. The Optimove Customer Marketing Cloud offers multidimensional segmentation with predictive components, and uses that segmentation to drive a powerful campaign automation, execution and optimization engine. Learn more about Optimove here.
The post You Will Never Look at Your Customers the Same Way Again appeared first on Optimove.