What is customer segmentation?
How many times have you been on the receiving end of customer segmentation marketing that completely missed the mark? Just last week, I received a free sample of a plant-based cereal dubbed a superfood because…why, exactly? After all, I love my chocolate chip cookies as much as my green goddess salad. Another time, a targeted ad pushed an energy drink—you’d think, with an infant in the household, I would need an energy-inducing product; but what I’d rather have is a sleep aid. And recently an unsolicited catalog promoted matronly pantaloon pants and dusters covered in southwestern prints. Dare I ask: how old do you think I am, database?
And that’s the thing. Some tool—or person—tasked with building my profile got it wrong, or at least wasn’t in sync with my life’s current state. Being in sync is very important because what we intend to buy today will very likely not be the same as what we’ll want to purchase tomorrow, next week, next month or next year.
With the influx of internal and external data, consumer products companies need to get targeted marketing right. The message needs to be relevant at the right place and the right time. And timely offers need to reflect not just past purchasing behavior, but also take into account life stage, life events, social trends, influencers, personality types, channel preference, product sentiment, assortments, affinities, tastes and so on. By the microsecond, consumers are arming consumer product retailers with the information these companies need about them to make their pitches more receptive, carry inventory with the right products at the right price, and grow their revenue across multiple channels.
Consumer segmentation and customer databases are no longer based on a few descriptive attributes that get left dormant over time. The process is much more intricate and dynamic now, and more akin to a living organism. Today, consumer product organizations can tap into data about consumers from a wealth of sources and data types that enable much more granular segmentation with persona-level attributing and with geospatial information. And they can provide it at the hyper-local market level, factoring in social content—such as online reviews and tweets—along with weather information and local events to build effective promotions.
A cognitive path to consumer insight
In your trade planning and promotional activities, consider a more consumer-centric approach. A substantial number of promotions don’t break even, and spending on trade promotions by consumer product organizations accounts for a significant portion of gross sales. What a waste—not to mention so many missed opportunities to keep consumers engaged and loyal to a brand.
Cognitive analytics enable consumer product companies to leverage valuable consumer and localized market insights to take the guesswork out of marketing. They can create rich and highly dynamic consumer profiles, gauge sentiment and help improve demand forecasting and trade promotion plans with laser-like accuracy. The other intrinsic benefit: they can shorten the go-to-market time for product launches, allowing marketers to adjust their strategy midcourse if needed.
Get more data-driven insight in this consumer products smart paper on how retailers and consumer products companies can learn from customer segmentation in an informative consumer products smart paper.