Slice and Dice Data To Discover High-Value Opportunities
Market segmentation is an often under-utilized technique that allows marketers to group similar prospects or existing customers together, for the purpose of being able to develop greater personalization in marketing methods. If you think about a continuum with personal marketing (one-to-one) marketing on one end and mass marketing on the other end, market segmentation allows you to move closer to a more personal marketing approach, and away from a mass marketing approach. The more tightly defined your segments, the closer to one-to-one marketing you will be.
In many cases, you can group people through statistical techniques that look for commonalities and differences between individuals. However, it is always possible to manually segment and to begin testing based on your experience with differences that matter in your business or your industry. For instance, segments may be established by purchase amounts or frequency, characteristics of the individuals, observable behaviors, etc. Finally, one exciting trend is the use of marketing artificial intelligence to move toward mass one-to-one marketing, which of course would be the most effective method of segmentation.