It's not enough to review your segments every three months; you must review them and take action, building your annual marketing strategy around the consumer behavior you've noticed.
I've been thinking a lot about segmentation. While it's a standby marketing tactic from the good old days, in the digital age there are new rules when it comes to understanding and responding to your customer segments. And while we've gotten better at reviewing data more frequently, many organizations haven't yet mastered turning that data into action in a timely way.
The average company is reviewing data every three months, which is fantastic. The issue is that often those companies aren't turning around and immediately responding to the changes within that data, particularly as it relates to segmentation and creating a personalized experience for every customer.
Seasonality is a great example. Often, organizations base seasonality on a merchandising cycle, maybe updating their strategy every six weeks or six months in the context of the product, for instance, when a product gets launched or liquidated.
While this might seem like a smart approach for a retailer, it's necessary to take frequent looks at the true ebb and flow of the consumer, rather than just a product. For instance, a typical retailer might note these shifts in customer segments and traffic in a year. Let's take a look at seasonal strategies for two different times of year.
First Quarter (Q1)
Often a liquidation quarter for retailers coming out of the holiday season, a good question to ask is: how are you aligning marketing spend and website content to reinforce inventory liquidation as your primary driver for your main customer segments? And are there different visitors coming to your website during this time compared to the holiday season?
Based on the visitor mix, you may look at acquisition methods and programs differently. Don't just look at what products or price points were moving. Look at how the traffic and customer mix may vary compared to other times of year. Geography, technographics, and even lifetime value of a customer are all areas to analyze for this time of the year.
Fourth Quarter (Q4)
Obviously, the last three months of the year are king for retail. This is the quarter most organizations plan for, and prep for, year-round. However, it's important to understand that this isn't the only time when you can understand and respond to customer behavior. While holiday campaigns and promotions are great, there are ways to maximize spend by targeting segments throughout this season.
These are just some examples of how customer behavior can change throughout the year, underscoring the need for companies to keep a closer eye on their segments and plan to respond in a timelier, effective way.
Think of keyword search buys as another example. A typical organization will use the same keyword search buys from January to October, and then make a change in order to capitalize on holiday traffic from November to December. But that strategy is leaving money on the table for most of the year.
Instead, why not look for more effective keywords throughout the year? If you're reviewing your data and visitor trends every few months you can incorporate those learnings into your overall marketing strategy and keep evolving your program.
Again, this isn't to discount the importance of Q4, but I think it's fairly telling that most organizations have a very sound and developed strategy for Q4 that responds to the customer and the marketplace. So let's look at two ways to prepare for each quarter like it's Q4:
You might realize there's a spike in returning visitors during a certain quarter, and plan to recognize them with an offer that encourages them to continue their patronage. You might notice a certain region of traffic increases during one quarter, and that might call for highlighting your in-store return offerings for nearby locations.
The bottom line is that it's not enough to review your segments every three months. Rather, it's important to review them and take action, building your annual marketing strategy around the consumer behavior you've noticed. It's the only way to help every quarter perform like the fourth quarter.
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Nathan Richter is the global director of client solutions at Monetate, where he advises top enterprise clients on website optimization. A veteran of digital marketing and online retailing, Richter has extensive hands-on experience helping enterprise clients implement successful multichannel marketing campaigns. Richter has directed online marketing and site optimization programs for David's Bridal, QVC, The Franklin Mint, and dELiA's.
Hong Kong, May 5-6, 2015
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