Introduction to Audience Segmentation

1. Welcome to the class: Hi, my name is Nikki Parsons. I'm a marketing director with over a decade of work experience. Do you often hear about audience segmentation, but it's not entirely clear how to do it? Well, it's not rocket science. And in this short course, you'll be able to do it yourself within 30 minutes. I'll start with some theory about what segmentation is and how it works, the different types of segmentation, and then show you how to create an audience segment. So if your goal is to figure out how audience segmentation works, then this short course is perfect for you. I hope you'll join me. Let's get started with an intro to audience segmentation. 2. First-party data versus third-party data: First party data versus third party data. The differences between first party data and third party data are important for marketers to understand. First party data is collected by you and your organization, from your leads, customers, and your wider network. You can collect first party data from your website, apps, social media, e mail, CRM, and any other direct customer touch points. Typically, users provide their first party data through interactions like form submissions, where consent can be specifically requested. Third party data is collected by a third party. AKA, a person or organization that does not have a direct relationship with the person from whom the data is being collected. It's typically aggregated from various sources and sold to businesses for advertising purposes. I think you can already infer from these definitions, which one is seen as more compliant with data protection laws. That's first party data. Because that data is collected with a direct user interaction and typically with specific consent, it poses fewer risks. However, third party data enables a business to have a much wider reach. Until now, if you wanted to scale and reach new audiences, third party data remarketing was a great way to achieve this. Nevertheless, the current trend, especially as browsers like Chrome are phasing out third party cookies in the near future is towards first party data. 3. Introduction to audiance segmentation & types of audience segmentation: Continuing on the topic of data, let's talk about how to use that to segment leads and customers. Audience segmentation is the process of dividing people into subgroups based upon specific criteria that you define, for example, age or gender. We care about segmentation in both remarketing and re targeting, because we're interested in targeting specific groups with communications that feel personalized. There are lots of different types of audience segmentation. The eight most popular I've seen used are demographic segmentation, like I hinted at before, using age, gender, income, education, geographic segmentation, segmenting a user based on their continent, country, city, or distance from a location. Behavioral segmentation, segmenting based on behaviors like website engagement, product views, or purchase history. Levels of engagement segmentation. So this is segmenting based on how much a user interacts with your brand. For example, users who have visited your website three times in a week or users who accumulate a particular lead score, psychographic segmentation, dividing based on personality traits or interests, Media preference segmentation. So what channels the user is on, and what publishers, IE, newspapers, TV networks that they engage with. Benefit segmentation, segmenting based on the benefits the audience wants to achieve, so clustering people with similar pain points together. Buyers journey segmentation, segmenting based on where a lede is in the customer journey, for example, the awareness, consideration or decision stages. The list goes on, but these are the ones you're likely to need. 4. Using segmentation criteria to build an audience segment: You then use the segmentation criteria together to make an audience segment. To make an audience segment, consider what goals you have, what data you have available, and then choose the segmentation criteria which are most relevant to help you achieve your goal. By combining the segmentation criteria in different ways, you create unique audience segments. For example, let's say the most relevant segmentation criteria for me for a particular campaign are going to be segmenting a particular geography, and then on that result, segmenting based on demographic characteristics, and then maybe the media preference on top. Let's create some unique audience segments using these criteria. In one segment, I can include people based in Pittsburgh, who are male and aged 30-40-years-old and who read the New York Times online. While using the same segmentation criteria in a different way, I can have another audience of people based in Chicago, who are 20 to 25-years-old, and who get their news from TikTok. That's how segmentation criteria and audience segments work together. You can even create what's called a detailed buyer persona to build an audience segment representing your ideal customer. You then use that persona to help optimize remarketing campaigns to tailor your marketing strategy, content, and creatives. Web tools, like Google Analytics, and CRM tools, like Salesforce Marketing Cloud can help to simplify audience segmentation. So look at the particular marketing tools you have available as well. If you're overwhelmed by the choice, remember, there's no one correct way to segment an audience. It starts with considering the goals of the particular campaign, understanding what data points you have available. Creating a segment to test and iterating upon that. 5. Demonstration how to create audience segments: In this lecture, I'm going to take our theory about audience segmentation and show how that works in reality. I'll talk through a business scenario and one way we could approach it. Then in the next lecture, you'll have an activity where you need to do a similar segmentation so you can practice. All right. I'm here in our activity document, and you can follow along with this document. You have it in the resources of this lecture. So let's read through the instructions. First, we should read the business scenario to understand the objectives and available data points. Then choose at least three criteria to use in the segmentation. Then explain why we use those criteria, considering the campaign goals. And lastly, make two potential audience segments using our segmentation criteria in two different ways. All right, so the background. Summer breeze apparel is a popular online clothing store that specializes in trendy and affordable summer wear for all ages. The store offers a wide range of products, including swim suits, casual dresses, shorts, sandals, and accessories. The company is noticed to dip in sales for their summer collection compared to the previous year and wants to boost their summer apparel sales through a remarketing campaign. So their goal is to increase the sales of their summer apparel collection by targeting past customers who haven't purchased in the last six months, to return and shop the summer collection. It looks like we've got quite a lot of data here, so let's take a look, we have age. Customer ages range 18-55 years, gender, data on whether the customer is male or female, purchase history, information on past items, the customer bought, frequency of purchases, and average spending, geographic location, which city the person lives in and its proximity to popular vacation spots, and website engagement. Number of times the customer visited the site, product page views, and track website events, so adding to cart or saving in a wish list. Levels of engagement. So customer e mail open rates and click through rates with promotional e mails, behavioral data, how often they purchase in store versus online and responsiveness to past campaigns. All right, so we read through that. That seems like a lot. Don't stress. Let's take it step by step. So now we finished instruction number one, which was to read through the scenario and understand all the objectives and the data points we have available. So now let's think about, based on these data points, which segmentation criteria are going to be able to help us the most. And how do we want a segment? So I think probably age is going to be a key one because different age groups are going to have different fashion preferences. That's going to be crucial for a summer apparel campaign because we can probably target different types of clothing, different age groups. I think geography also makes sense because customers who either live in warmer climates or near vacation hot spots are probably more likely to need to purchase more swim suit options, something like this. And then probably website engagement as well, because higher engagement on those summer product pages are going to demonstrate that there's a strong intent to purchase. And as this is a remarketing campaign, we care about them completing that conversion. So I think that's a very strong data point. So if we use then age, geography, and website engagement, and if we use these together in two different ways, we're going to accomplish the final task of this activity, right? So now we've done step one, which is to read through it. We've done step two, which was to choose our three segmentation criteria. Why we would choose those three segmentation criteria, the reasons I just gave to you now, so we could write those. And the last step here is to make two potential audience segments using the same criteria. So One, using age, geographic and website in different ways. So one could definitely be something like young adults who live near the coast, who frequently visit the summer apparel section of the website, and they've shown an interest in those kind of trendy fashion. So I would consider that like young adults 18 to 25 in coastal cities. That could be one audience segment. And another segment using the same criteria of but in different ways. We could say, k, middle aged women, in that case, rather than young people will go for middle age women. This time, 35 to 45-years-old. And let's go in suburban areas. So this could be women who live in suburban areas and who frequently engage with the brands website. Maybe they're going to be going on holiday, and that's why they're constantly looking at the website. So I think that shows two very different audience segments. So, now it's your turn to try. Here we looked at a remarketing example. The example I'm going to leave for you and the activity is going to be a re targeting example. But you'll see that the logic of how to think things through remains the same. Good luck. 6. Before the class project: Before continuing with the next videos, please head to the projects and resources tab below. There you have all the activity instructions, there in PDF format as well. Plus, you also have the PDF that I looked through in the demonstration video in case you want to go back and rewatch some of that content while preparing your submission. So Hip pause to stop the next video from auto playing and go try it yourself. 7. After the class project: Great job for submitting. What I wanted you to practice in this example is how to use segmentation criteria to create an audience segment, and I wanted to give you the chance to do that in a more hands on practical way. I look forward to seeing the answer you submitted. 8. Thank you & next steps: Thanks for joining me in this c for an introduction to audience segmentation. If you're interested in learning more about marketing, project management or leadership in general, then please follow my skill share profile to be notified of future classes. You can also follow my blog or podcast for more tips and tricks. Lastly, I want to thank you again for taking this course. I appreciate that you've stuck around for the end, and I hope to see you in a future class.