In the not so distant past, marketers and PR pros relied on generic demographics such as “women over 50” or “men aged 35-50” to reach consumers. More nuanced customer segmentations, however, narrow the focus to high-potential groups with unique attitudes and behaviors in order to guide product development and communications and create effective PR messaging.
Customer segmentation strategies for different audiences
In data-driven customer segmentation, individuals are grouped by behaviors, experiences, needs, and feelings. This enables businesses to better understand current and potential audiences, effectively prioritize marketing investments, and target PR and social strategies to a particular audience’s interests.
A segmentation for a restaurant, for example, might yield three segments – consumers who prioritize nutritional value, those more concerned about cost, and those who place a high value on customer service. If the latter group is a priority, the company could use the detailed, targeted customer profile to craft focused messaging that showcases the restaurant’s well-trained, long serving staff, as well as other elements that distinguish its customer service.
While one customer segmentation might yield three groups, others might yield hundreds. Procter & Gamble’s CEO David Taylor announced in July that the company is “reinventing brand building from wasteful mass marketing to mass one-to-one brand building fueled by data and technology.” The company’s 350 precise “smart audiences” now include new mothers, millennial professionals, and first-time washing machine owners.
A segmentation strategy to entice Millennials onboard
Royal Caribbean’s segmentation strategy enabled it to craft messaging for a new group of potentially lucrative consumers: millennials who had never taken a cruise before. The company is spending more than $1.1 billion to refurbish ships with onboard activities such as Sky Pads (a bungee trampoline with virtual-reality features), glow in the dark laser tag, a 40-foot surf simulator, and Tiki Bars with digital cockatoos. Royal Caribbean is targeting millennials with fun social media campaigns such as the Shore Explorer Apprentice-ship, a gig-of-a-lifetime that attracted 37,000 applicants in 2019. Those hired by Royal Caribbean for the Shore Explorer position document their adventures on Instagram, becoming influencers who champion the brand. Using customer segmentation, Royal Caribbean crafted effective messaging to highlight the appeal of cruising for a new target audience.
Check out how Kelton worked with Royal Caribbean on a global segmentation that helped the cruise line triple its earnings.
Spotify recently found itself on the opposite side of the Millennial problem — rock solid with younger listeners, the company wanted to reach an older audience. “There are people who have been on the sidelines of streaming and now they’re ready to come in and adopt streaming,” said Seth Farbman, Spotify’s Chief Marketing Officer. To connect with consumers in their late 30’s and early 40’s, Spotify leveraged surprising facts about users’ listening habits to craft nostalgia-inspired messaging aimed at its target customer segment. The resulting campaign included key characters from the 80’s classic The NeverEnding Story, noting that the movie’s title track is still streamed every day.
The need for simplicity and convenience
While some of their competitors used traditional demographics to segment customers, a more defined customer segmentation strategy helped Dollar Shave Club achieve rapid success. The company grouped potential customers not by age or location, but by their need for simplicity and convenience, targeting consumers eager to avoid hassles associated with shopping in store for razors (such as having to ask sales assistants to unlock product). The company introduced flexible subscriptions, made running out of razors a thing of the past, gently made fun of competitors offering gimmicky razors, and marketed their product with taglines like “Our Blades are F***ing Great.” Dollar Shave then branched out into grooming products their customers wanted.
Read more about how we crafted a segmentation strategy that helped Dollar Shave Club create stronger connections with their customers and drive monumental growth.
In a nutshell
The best segmentation strategies can help drive brand strategy and create impactful messaging. At Kelton, we’re proud that our customer segmentation strategies have energized global brands, disruptive startups and everything in between. Contact us to learn how customer segmentation can drive your marketing strategy and boost on-target messaging.