Microsegmentation for Macro Returns
If there’s one strategy that should guide your marketing tactics for the next 12 months, it’s microsegmentation. What we used to call the “average” customer no longer exists. Customers increasingly see themselves as unique individuals, and perception of this newfound individuality has exploded in the past 10 years. Connecting effectively to a country of individualists requires a keen ability to speak to the specific needs of a larger number of smaller groups. This trend will only increase over the coming years, and likely never reverse.
For an example of the power of this approach, look at how the Republican Party maintained so much control over politics since it began using this exact approach in the mid-1990s. It wasn’t until recently that Democrats began to emulate this effort, and it took a war as controversial as Vietnam to change this balance of power.
This long-term trend requires ongoing and consistent efforts to change how your organization connects with its customers. Your budget and calendar may be fairly static, but where and how you allocate resources is still up to you. The microsegmentation approach is the strategy I’m advocating for tactical decisions over the next year. This approach ensures that your organization will constantly improve its capabilities to produce higher levels of relevance in communications and content.
Benchmarking and objectives
Start by benchmarking your current capabilities. How many segments can you comfortably interact with on a regular basis? Can you realistically separate your customers into two groups and interact differently with both of them? Into 20 groups? Or even into 2,000? Taking a hard look at your capabilities will help establish the baseline for future improvement in microsegmentation.
Your capabilities might not be consistent across channels. Your Website personalization may be better than your e-mail segmentation, which in turn could be better than your direct mail or freestanding insert versioning.
When looking at 2007, your objective should be to increase the number of market segments you can support by a reasonable yet substantial amount in every channel. Regardless of how many segments you can support today, with long-term trends as they are, this number must improve every year.
Using the strategy
As you plan and execute your marketing efforts, you need to pay more attention to identifying multiple constituencies among the target audience, and then you need to develop specific messaging for each of these constituencies.
It is by focusing on this one critical aspect of your operations that will generate substantial benefits for your company. When making marketing decisions, ask yourself “Does this increase our ability to talk to more segments?”
You may be skeptical of how focusing on microsegmentation can affect other aspects of marketing—as well as how other aspects of marketing can affect microsegmentation. Take a look:
* Technology Microsegmentation goes hand in hand with an emphasis on analytics, campaign management, and content management, increasing your ability to manage simultaneous campaigns and to automate response to key behavioral triggers.
* Personnel Microsegmentation emphasizes creativity and disciple simultaneously, improving the overall skills and quality of your team. Plus there is reduced emphasis on any single message, encouraging risk taking and (again) emphasizing analytics.
* Processes Inefficiency is quickly spotted and reengineered, improving operations throughout the team. Ideally an individual is tasked with making improvements throughout the current process chain.
* Documentation Interdependencies between teams skyrocket, so clear and usable documentation becomes a necessity. Performance improves immediately. Trust me.
* Content Your library of useful content grows rapidly. This is not without cost or effort, but within months your assets are leveraged across teams instead of developed in silos.
Make sure everyone on your team understands and supports the microsegmentation objective. Post a note on everyone’s monitor asking how every decision moves the company toward this objective. Maintain your focus, and you’ll find yourself at the end of 2007 with a dramatically better relationship management infrastructure and more responsive and loyal customers.
Michael Greenberg is vice president of marketing for Loyalty Lab, a San Francisco-based developer of customer loyalty programs for the retail industry, and writes a monthly column for CHIEF MARKETER. He can be reached at [email protected].
Other articles by Michael Greenberg:
Balancing Visible and Hidden Relationship Programs
Evolving Loyalty: How to Stay Current
The Best Marketing Investment You Can Make
The Case for Simultaneous Concept Testing
Planning for the Coming Online Standard
Why Do You Have High-Value Customers?
Build a Fence Around Your Customers
