Why Segmentation Really Matters

Updated: Oct 27, 2020

This image shows a tree in a forest and the words Data 101 Big Tree, Most providers will sell you a tree when you need to buy kindling
Don't buy a tree when you need kindling!

Buying data for the first time can be daunting. It's like if you'd never made a fire before, you might not realise that a big tree won't be the ideal fuel to start that blaze.

Your starting point is the forest. Look at all the big trees. Which one will you choose to start your fire? How are you going to chop it down? And even if you do manage to do all these steps, will a big piece of un-seasoned wood make a fire?

With data, your starting point is your own database. Who is your customer? Have you analysed and segmented? Knowing your customer is critical when it comes to maximising your marketing efforts.

Many businesses collect data, but it is amazing how many choose to overlook the goldmine of information at their fingertips.

Start by looking for patterns that match your business. Do your customers reside in a certain part of the world? Does your business require a minimum spend? These are some of the factors to consider when trying to define your customer.

Here are some standard points to consider when segmenting your database:

  • Geographic location

  • Industry - Standard Industry Code (SIC)

  • Product group / range and how is the product used

  • Organisation size - number of employees

  • Organisation turnover

  • Product delivery

  • Special use / needs

Once you know what you are looking for, then you can truly engage with your customer; improve your current product or service to fully serve that customer; focus your marketing strategies to maximise impact; and acquire new customers through business development and data.

Make your "Big Tree" manageable

This image shows a picture of stacks logs in an open field
Trees are easier to stack when they are cut into smaller logs

Now that you have identified your target customer with segmentation, you can now employ a targeted marketing and growth strategy with data matching your current customer profile. When your business looks at purchasing data, there are standard business fields that you will be able to search and specify:

  • Company name, address, contact name

  • Email address

  • Company registration number

  • Turnover

  • Thomson classification

  • No. of employees on site

  • Date established

  • Head office indicator

  • Legal Status

  • Telephone number

  • No. of employees in business

  • Age of business

  • Premises type

  • Start-ups

Ask your data provider to help you with which business fields would help you target the best prospects - they should be able to guide you through the complexities.

Most big data providers are only really concerned with selling you bulk amounts of data - because that's their business model. They don't really care whether this is the best data strategy for your business.

Now this is fine if your business has the capacity to deal with large amounts of data. But you might want to think about smaller and more manageable amounts of data that your business can process. If you take on a big list, you may find that it's no longer up-to-date and relevant by the time you use it. Call centre teams would call this 'bad' data, and the'd be right, because you haven't been sold the data that was right for your business.

You also have to remember that most data isn't a qualified lead either. It is cold. Your sales team might be great at closing a sale, but are they any good at warming up potential customers? It might be a better idea to pass a cold list to your marketing department first to start qualifying leads before passing to through to the sales department.

If cold calling isn't in the DNA of your business, you may have a higher conversion rate with super-refined data. Can your data provider give you specific business intelligence add-ons? Could they pre-qualify the data before passing it to you? There may be a higher cost in this process but it may save you time and money in the long run.

Ready to make a fire

This image is a photograph of cut wood and split logs stacked in a pile
Smaller logs and kindling are easier to start fires with

Now you've managed to select your tree, chop it down and cut it into logs - it's time to see if you can make a fire.

Every boy scout (or middle-aged person with a wood burner) knows that making a fire is a delicate balance. You need some form of ignition (your business), tinder (your service/product), kindling (marketing activity) and logs (the new data).

And you can't just pile those logs on and hope that things are going to heat up - too much wet wood will put your fire out pretty quickly. My personal approach to fire building is finding the perfect stack of kindling. Some people like to build a stack like a tepee - I think this is too unpredictable. I like a grid system or log cabin as it's called. Neatly stacked with plenty of room to let the oxygen circulate and the stability to add your bigger logs on top. Data advice and fire making - not all data providers will give you this!

Here's the illustration:

This image shows properly stacked wood for a fire and the words The Log Cabin - Providing strategy and stability allows your data the ease to burn effectively and efficiently
The log cabin approach to building fires

Finding the right marketing strategy and having a plan in place is the key to making the most from data. Will new leads be contacted via email or called? Do you have a strategy in place to make sure you nurture new leads and get them in your marketing funnel?

With all the best will in the world, a lead is only a lead - it's up to you to convert them into a customer. And a potential customer will need to trust you and feel that you have something that will help them out and solve all their problems.

Do you run your own business and it's up to you to generate new business? But you're not a salesperson, right? How To Be A Business Owner And Sales Superstar - coming soon!

We have fire!

This image is a photograph of wood burning and flames on the wood pieces
This gives me a warm and cosy feeling about data!

Once you have your fire ablaze - you will need to tend to it and nurture it to keep it going. At this point, you've either done a lot of work, or your data provider has come up with the goods to give you great data to help grow your business.

But there's no time to sit back and toast marshmallows - it's time to tend to your fire and make sure it doesn't go out. And make sure you don't get burnt!


#customerprofiling #datasegmentation #data101

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