Matching Promotions and Offers with the Right Customer Segments

Source: https://postfunnel.com/matching-promotions-and-offers-with-the-right-customer-segments/

Everyone loves a good promotional offer—as long as it appears to be created just for them.

Salesforce found that:

  • 62% of consumers want personalized offers based on their purchase and engagement history
  • 57% are willing to share additional personal information in exchange for more tailored offers
  • 53% would share more personal info to allow the brand to provide a more personalized overall experience

While one-to-one personalization isn’t far off, most companies can’t make it a reality without overextending their capital resources. But that doesn’t mean you can’t create multiple offers tailored to various audience segments.

We’ll discuss how to create segmented promotions that resonate with and engage your target audience. Let’s start from the beginning, at the campaign concept phase.

More from PostFunnel on segmentation:
4 Benefits of Customer Segmentation for Higher Profitability
3 Customer Segmentation Models Every Marketer Should Consider
The Price of Customer Diversity: Segment Or Wither

Set a Goal for your Segmented Promotion

Your first order of business is to determine what you hope to accomplish through your next promotional offer. Your best bet is to start with a broad scope, getting more specific as you narrow down your intentions.

Do you:

  • Want to attract new customers to your business?
  • Want your current customers to purchase more?
  • Want your current customers to purchase more frequently?
  • Need to spur sales during slow seasons?

While you don’t need to nail all the details right away, you should emerge from this initial line of questioning with a general idea of how your campaign will unfold.

For example, if your goal revolves around retaining your current customer base, a first-time customer promotion isn’t relevant. The clearer your goal, the easier it will be for you to develop an optimal plan. Without this step, you’re going in blind.

Define the Metrics and Crunch the Numbers

The next step involves looking at the metrics and numbers behind your campaign from two different angles. First, you need to nail down your key performance indicators and the metrics you’ll use to determine whether you’ve reached those goals.

If you’re looking to generate new business, your focus might be on increasing mailing list conversion numbers, as well as first-time visitor conversion rates. If you’re aiming to get current customers to purchase more often, focus on purchase frequency—and consider how improving this metric affects your overall customer lifetime value.

You also want to consider how achieving the goal will impact your company’s bottom line. Unfortunately, it can be all too easy to get caught up in the relentless pursuit of a KPI—only to realize that during the process, you’ve overextended your budget.

This granular alignment between your KPIs, metrics, and overall bottom line will set the stage for the next few steps of the process, where you’ll determine whom to target and what you’re offering.

Identify and Define Your Target Audience(s)

Just because two different customers are at the same stage of the sales funnel doesn’t mean the same exact offer will resonate with both of them. Your goal is to identify the subsegments so as to create different versions of a promotion to engage with different audiences.

Let’s say a sporting goods store wishes to attract first-time customers with a discount offer. Though the company can provide the same discount value to all first-time customers, it may alter the context based on the targeted persona. For example, the company may offer first-time customers living in urban areas a one-time discount on basketball or skateboarding equipment, while offering those living in coastal areas the same discount on surfing gear.

Another reason to define your targets is to determine the best way to reach customers with your promotional offer. For example, when targeting first-time visitors, you’d likely implement on-site tactics such as pop-ups, banners, or in-content CTAs.

(Source)

Or, you might create a PPC campaign to retarget these individuals on Google and social media.

(Source)

If targeting current customers, you can assess how best to reach them based on their previous interactions with you.

If your target audience doesn’t see your promotion, they’re not going to be able to take advantage of it. And even if they do see it, they still may not engage with your offer if it’s presented in an unwelcome manner.

It’s vital that you define whom you intend to target with your next promotion—and to determine how you intend to do it.

The guide to advanced customer segmentation

Develop a Valuable and Economical Offer

Take a moment and go back to the three examples we used in the previous section, paying special attention to the value being offered in each.

To quickly recap:

  • Sportique offers potential customers a 10% discount on their first order
  • Indochino takes $50 off a new customer’s first custom order
  • Shopbop gives existing customers 25% off their next order

These offers seem standard—but that isn’t to say the companies chose those specific values (10%, $50, and 25% off) because they’re the norm.

It’s more likely that they landed on these numbers after carefully considering a variety of factors—both customer-facing and internal.

A quick look at Sportique’s product catalog shows that the 10% discount offer could mean anything from getting $1.80 off an order of skin cleanser to getting $70 off a new watch. 10% off sounds a lot more valuable than $1.80. This technique allows Sportique’s first-time customers to determine the value of the offer based on their purchase decision.

Indochino takes a different approach to showcasing their offer’s value.

Instead of offering a discount that scales with the value of the purchase, the company offers a flat $50 off all initial purchases of custom suits—which start at $369. That’s a discount of 13.5%, but again, “13.5% off your first order” just doesn’t sound as good as “$50 off.”

Of course, there’s more to developing a solid promotional offer than providing value to your customers.

When determining an offer’s value, you need to know that you’ll be able to recoup the initial loss as quickly as possible. To determine this, examine your target audience’s value. Let’s compare Sportique’s offer for first-time customers with Shopbop’s offer to their existing customer base.

From a birds-eye view, it makes sense to offer a larger discount to those who have already proven their value to your company, and to be more wary of giving too much away to customers whose value is yet to be determined. Still, for each company to land on these specific values of 10% and 25%, they likely dug into data regarding each persona’s customer lifetime value, average order value, repeat purchase rate, and more.

They were then able to determine the exact offer that would lead to the most gains for their company—while still enticing their target audience. Putting together a solid promotional campaign isn’t as simple as presenting a ‘standard’ offer and waiting for business to take off.

For a successful campaign, your team must:

  • Set clear goals for the initiative
  • Know your target audience and how to approach them
  • Determine the exact offer that will get your audience to take action and bring even more value to your company

By going through this process each time you create a new promotional campaign, you’ll be able to move forward with confidence knowing your efforts will ultimately pay off.

Want more in-depth insights about segmentation? Join us for the PostFunnel Summit

The post Matching Promotions and Offers with the Right Customer Segments appeared first on Post Funnel.

tomas

LEAN LEADERSHIP CONSULTANT at TOP WEBINARS EVENT
Online enterprenuer.
Lean leadership consultant.

tomas

Online enterprenuer. Lean leadership consultant.

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