How To Use Segmentation To Increase Marketing ROI

November 11, 2022 Julio Romero

Reading time about 6min

How To Use Segmentation To Increase Marketing ROI

Winback Team on Jun 3, 2021 1:59:22 PM

Most marketers don’t pay enough attention to segmentation. But today, we will share some great tips that will help you harness segmentation and boost your ROI by leaps and bounds. Follow this quick guide to approaching segmentation methodically.

How To Use Segmentation To Increase Marketing

Why Is Segmentation A Basic Necessity For Marketing Efforts?

Planning your efforts is the first step to execute in a marketing plan, and segmentation plays an intimate role in the process. But before we begin with understanding its necessity and the broader role it plays, you must build a comprehensive data capturing strategy. Your data will be the fundamental resource that facilitates all activities concerned with segmentation and analysis of your strategy’s success.

For instance, the opt-in form and previous engagement rates can be considered as your data range in the case of email marketing. Therefore, you must pay enough attention to gathering insights for accurate segmentation. Let’s now have a look at the reasons that make segmentation a must:

Segmentation Allows You To Find And Target Your Warmest Leads

Low effort-high gain is the best value proposition for any marketing game plan. Segmentation will help you find out the warmest leads among all your inquiries and plot the factors that will impact their decision-making.

This is an important aspect for every marketer as warmer leads have a high tendency to make purchases from competitors. Thus, segmentation can help fix such leaks from your sales funnel by directing your efforts towards converting the leads that have firmly decided to make the purchase and are considering you.

Segmentation Helps Calibrate Your Efforts For Potential Revenue

Naturally, the second step would be to prioritize different levels of purchase intent and target them. Without segmenting your prospects accurately, this would be next to impossible. The reason is quite simple: approaching the lead with the wrong marketing material will only turn them off.

You need to consider their current position in terms of the buyer journey. If someone is looking for educational content, sending them last moment offers is of no use, and the same applies in every case where your efforts don’t meet their expectations and aspirations. Segmentation helps systematically channelize your efforts to maximize your revenue.

It Allows You To Create Marketing Material From The Ground Up For Each Group Of Prospects

Here’s where you benefit the most: Creating the right marketing material. Every customer segment has its unique set of motivations, decision-making parameters, and needs depending on their purchase journey. If you segment them correctly, you will be able to create highly relevant and accurate marketing copies that will resonate instantly.


Segmentation To Increase Marketing

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You can see in the above image that the visitors are largely divided into new and returning visitors which makes it necessary to serve both user groups. Planning saves you from making last-minute edits or restarting your creative portion of the work again at a much later phase of your marketing activities. This also helps you implement strategies like content stacking which slashes off a huge portion of your marketing costs. Remember, lesser investment in your marketing efforts directly translates to a higher ROI even if you are getting the very same results in both cases.

You Will Get Insights To Different Factors That Determine Execution

Lastly, segmenting your existing customers (for repeat business) and prospects allows you to map out all essential parameters that you will need to keep in mind while executing the campaigns. This includes determining the most favorable outreach channels, ideal frequency, the right send times, distribution mechanisms, and feedback system.

This will also aid in establishing a proper analytical model for studying your progress as well as studying campaign performances. Thus, you can dive far deeper than solely relying on vanity metrics of the channels that you used for marketing.

How Segmentation Helps Project A Better Brand Image And Boost Conversions?

In the above section, we had a look at the aspects that help your marketing efforts on a strategic level. However, the impact of segmenting your existing clients and prospects is multi-faceted. Here, we will try to understand the benefits/ positive aspects experienced by your leads. All of these factors contribute to your conversion rates and ultimately boost your conversion rates:

Your Customers/Leads Will Find Your Marketing Efforts More Relevant

One of the biggest game-changers of segmenting your audience is them finding your marketing materials and campaigns highly personalized. This acts as an indicator of the right market fit, but there’s more to it. You wouldn’t sound pushy, and your audience will not feel that you are violating their privacy. In most cases, such perception is created due to lacking relevance.

A well-segmented campaign assembles all the right elements viz. time, person, platform, timing, material, and offers at every single instance. This can prove to be extremely beneficial for boosting your bottom line as your time and energy are consumed only by the people who are likely to make a purchase.

The Leaks In Your Sales Funnel Will Be Identified Quickly

Another aspect that a lot of marketers overlook is that segmenting correctly helps fix their leaking sales funnel. Every lead in your mailing list or other platforms has spent enough time researching what they need and has arrived at your name as one of the possible sources to satisfy their demand. If they do not complete the purchase, the whole point of running your marketing activities gets compromised.

While we cannot completely avoid this phenomenon, segmentation can help us limit it to a large extent. It helps you constructively engage your prospects. For instance, sectors like real estate, which have longer sales cycles significantly, can send email newsletters to their prospects to keep them engaged during prolonged research periods. Not being able to do so may reduce your chances of getting shortlisted.

There are innumerable such cases where segmenting indirectly helps fix your leaking sales funnel. This aspect revolves around finding the gaps between these eCommerce visitor segments:

Segmentation To Increase Marketing

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Employing Segmentation in Marketing: Shifting from Marketer to Consultant

Here comes our personal favorite. The single biggest factor that acts in your favor when segmenting is that you can play the consultant instead of a needy salesperson looking to close a deal. The very same pieces of advice like making sales a win-win game, displaying that the buyer is benefiting equally from the transaction, are often overlooked in digital marketing, just like in the case of traditional marketing.

Segmentation and personalization go hand in hand, which helps project your brand as a source of genuine insights regardless of automated marketing. Here we again pare down things to their basics. Since you send messages that resonate with their purchase intent and buyer journey every single time they interact, your audience will soon find you as an authoritative figure. They will no longer consider your marketing efforts as promotional, and instead, they will look up to you for contributing to their purchase. This would definitely improve your sales and customer loyalty, two of the biggest deliverables for any marketer. Talking specifically of customer loyalty, the below infographic shows why it’s necessary to target this segment for higher profitability:


Segmentation To Increase Marketing

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Enhancing Segmentation Efforts to Boost Your Marketing Strategies

Now that you know the benefits of segmentation on both marketers’ and audience’s ends, let us see how you enhance your efforts in that direction:

Test, Test, and Test

This is a highly effective yet simple maxim for segmenting your audience correctly. A common mistake we have observed is creating segments once and using them for uncannily long periods. This is simply ineffective as every lead changes their demographics, psychographics, finances, and motivation over time. This needs to be measured periodically to keep your marketing efforts aligned with your audience’s evolving needs.

You will need to use different metrics and client reviews in combination to understand the actual impact of your marketing initiatives. No doubt, you will witness an increase in your ROI if you implement segmentation, but to sustain them, you will need to keep your eyes open for changes in your customer persona. These efforts will help target returning customers in a much more efficient manner which is again favorable for your ROI:

Segmentation To Increase Marketing

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Embracing Data Collection in Segmentation To Increase Marketing Effectivenes

Lastly, we would like to stress the fact that we discussed in the beginning: Collect data! You should focus both on the quality and quantity of data when considering segmentation. Also, you need to update its inadequate frequency to save it from becoming obsolete. Ideally, your data collection efforts should be aggressive right from the beginning and update it frequently.

Getting a high ROI is highly dependent on segmentation, and it is, in turn, dependent on your data’s accuracy. Be enthusiastic regarding this aspect right from the beginning, and you will continue to reap results without investing much time and effort eventually.

Segmentation To Increase Marketing: Our Final Thoughts on Effective Segmentation Strategies

Throughout this article, we can trace a pattern that can be considered the key to skyrocketing your ROI. Use segmentation as both an input and output consideration. Once you have run your marketing campaign, the results are to be used as segmenting parameters just like the beginning. The more you implement this approach in all your marketing activities, the higher ROI you will yield.

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Topics: Shopify Marketing