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Marketing/Tech: The Amazon effect of segmenting consumers

June 30, 2014 -  By

ID-10053783Amazon has built an empire by providing its consumers with a range of products, becoming a one-stop shop for most people’s entertainment needs. The amazing thing is it didn’t achieve this lofty status by advertising ad nauseam to the masses. Instead it focused on segmenting its consumers online and building a remarkably customized experience for each consumer. Like Amazon, you too can use technology to segment, target and position your brand, creating an irresistible experience for consumers.

Creating a segmentation strategy

The key to any successful marketing campaign is to have consumers receive and resonate with your advertising message. Unfortunately, we live in a time where there are many advertisers and mediums to broadcast messages (e.g., television, the Internet, radio, direct mail, etc.).  Because of this, consumers have become very good at filtering out those messages. The key to reaching consumers is to segment them, placing them into groups with similar needs. By targeting these specific needs, marketers are able to position their products as the solutions to consumers’ problems, making it more likely their advertising message is received by the right consumer.

While segmentation is not a new concept in the Green Industry, most companies have been segmenting their consumers based on generic demographic and geographic information (e.g., home value, gender, income, location, etc.). The hope is by targeting these basic segments, their messages will be received by consumers in their company’s coverage area who can afford their services, producing new sales. The problem with this type of segmentation is consumers could have no need or interest in the different Green Industry products a company offers.

Instead of using a generic segmentation strategy that separates consumers by basic demographics, think about the ways your consumers differ.  From there, create “buckets”of different consumers based on product interests, past purchases, product choices, location and relationship levels. The more concentrated these “buckets” are, the more specific you can be with your messages and advertisements, creating a better overall response.

Segmenting in the Green Industry

When considering a segmentation strategy in the Green Industry, one must consider all the ways your potential customers differ as well as how current customers differ. Possible segmentations should include the following.

1. Current customers by products being used:

Believe it or not, your paver customers do not want messages regarding sales on paver installations, and your fertilizer customers do not need to be informed of spring discounts on fertilizing packages. Customers can be your best opportunities for cross-promotional product offerings, if targeted correctly. However, if you advertise products they already have, they will start screening out ALL of your messages. Look for opportunities for accessory or complementary products with these consumers. Separate your landscape paver customers, and send them information on enhancing their new patio with maintenance opportunities, cleaner products, accent lighting, etc.

2. Consumers by behaviors/interests:

One of the easiest segmentation strategies to use is to separate consumers based on their interests in your products. To gauge interest in different products, try offering guides or other downloadable information about different subjects through various forms requesting a name and email address on your website. If you offer paver patios, offer a downloadable “Paver buying guide” complete with pictures of your past work. By tying a form to these types of downloads, you’ll segment your consumers into different interest groups, allowing you to send targeted messages about those products.

3. Consumers by rejection/cancel reasons:

Perhaps one of the most overlooked segmentation opportunities lies in your rejection and cancel lists of consumers. Segmenting these consumers by the reason they decided not to do business with you can lead to timely and mind-changing emails that counter the reasons they spurned you. For example, if a consumer rejected you because your price was too high, you can provide them a series of emails that broach the subject, including information about financing the project, working in phases and other money-saving tips.

Technology solutions for segmenting, targeting and positioning products

As aforementioned, Amazon has built an industry by segmenting its consumers and customers. It has done this with a pretty complex technology system that segments its consumers with little effort by using software that automates the process. This software monitors its website visitors, their behaviors on the site, what products they buy and what information they download. As consumers navigate and interact with the website, information from their visit is recorded and provides updated content based on their actions.

While this may seem really complex, technology has grown to the point where any small business can perform similar levels of automated segmenting for consumers. Software products, such as HubSpot, Infusionsoft, Marketo and Salesforce upload your current customer information to build lists of segmented consumers based on similar attributes. Once in lists, these software platforms allow you to build automated marketing messages through emails, resulting in relevant advertising that positions products those consumers can use.

Good marketers use proper segmentation as a tool to have their messages stand out from the competition. Thanks to advances in technology, software takes the burden out of this practice, making it easier to separate and target certain members of your audience and automate your advertising. Segmentation truly is an art that can be refined as you gather more information from your consumers and will end up paying dividends to your business model and current customer relationships for years to come.

Photo: renjith krishnan/freedigitalphotos.net

Shaun Kanary

About the Author:

Kanary is Director of Demand Generation for Kuno Creative, a digital marketing agency. A member of the green industry for the past 20 years, he has consulted with green industry companies throughout the U.S. and gives marketing lectures at several industry conferences every year. Kanary is also an adjunct professor of marketing at Baldwin Wallace University and a Certified Google Adwords and Analytics Individual.

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