Segment marketing has transformed from its old-school demographic origins to embrace more dynamic and behavior-driven engagement. These changes allow brands to deliver experiences that are more personalized. Add Generative AI to create more, higher-performing campaign messages, and you can quickly and easily reboot your segmentation strategy. We’ll show you how. But first, let’s establish some basic definitions around what is segment marketing and why it might need a refresh.
What is Segment Marketing?
Segment marketing involves dividing your target market into smaller groups based on shared characteristics. The purpose of this segmentation is to deliver more tailored marketing strategies for each group. The goal is to produce higher engagement from them.
The benefits and challenges of old-school segmentation approaches
As experienced marketers know, brands delivering on segmentation campaigns traditionally divided their customers based on identifiable demographic characteristics, such as the zip code they live in, their age group, gender, marital status, and so on. This approach is still very much alive and well. Just glance through the junk mail catalogs that arrive in your mailbox, or the Meta advertisements that show up in your feed, and it’s obvious that at least some demographic segmentation is in play.
Demographic segmentation is so popular and has such longevity because it’s relatively easy to implement. It also works … sort of. The majority of women homeowners between the ages of 30 and 50 do at some point redecorate. Men who enjoy watching sports do buy tickets for live games.
But … and it’s a big but … traditional segments have severe limits. One is that they rely on “typical” behaviors, which can veer into stereotypes, about what people of a certain age or gender do or are concerned about. These are often overgeneralizations that don’t reflect reality. They might even be offensive. After all, some men like decorating their homes too and women are major sports fans.
Demographic segments are also static. They do not change as consumer behavior or preferences change. They function as if people of a certain age, gender, or location have the same goals and desires for 10 or 20 years and then suddenly shift simply because they’ve aged into a new demographic or moved house. Human beings aren’t like that.
And since humans aren’t like that, traditional segments miss opportunities to engage at a deeper and more nuanced level. Even to deliver on personalization.
Modern segmentation looks at behaviors
To be clear, marketers have understood these limitations for a long time. There have been many efforts to manage them. It’s the rare marketer today that only looks at a customer’s gender or where they live. Equally rare is looking at some combination of demographics instead of integrating other factors, like purchase or browsing history. If they can. The challenge has always been that different kinds of information often come from different sources. These can be challenging to integrate and activate. Still, brands are trying in particular to embrace behaviors as part of segmentation.
In the digital age, behavior data includes real-time web interactions. The goal is to create dynamic and even personalized segments. The behavioral approach (often combined with demographics) allows brands to engage customers based on their genuine interests and evolving preferences. Brands can intuit them based on customer actions. A behavioral approach to segmentation recognizes both the 25-year-old hiker and the 75-year old one, both of whom need hiking boots and rain pants.
Examples of campaigns leveraging behavioral segmentation and Generative AI
Consider how one Persado retail customer leveraged behavioral insights to its benefit. Persado is an enterprise Generative AI solution that generates language proven to outperform human-written campaigns by an average of 40%. The retail brand used first-party data from its customer data platform (CDP) to segment customers based on their responses to coupons, discounts, or offers. The brand was able to identify which customers needed an incentive to shop and which ones simply needed an attractive email with product information. The brand further segmented these customers based on the types of incentives that worked best. Some were more likely to shop if they got a 20% off coupon. Others needed Buy-One-Get-One coupons. The company leveraged this data in a series of personalized email and text marketing campaigns geared to the customer behavior, resulting in a significant performance boost.
Another example of behavioral segmentation comes from a Persado credit card customer, which leveraged behavioral insights to personalize customer service emails. In one campaign, the company identified customers that had recently missed payments. The company sent that group a Persado-generated email that encouraged them to sign up for automatic payment. The Persado Motivation AI-generated language produced twice as many automatic payment sign-ups than the company’s control message.
Learn more about Generative AI for payments.
Evolving your segmentation strategy with behavioral data plus Motivation AI to be more personalized
Brands do not need a CDP or another sophisticated customer data segmentation strategy to deploy a more effective and more personalized segmentation strategy. In fact, the session data captured on your website when a consumer visits and browses is enough to get started.
Persado Dynamic Motivation works by leveraging a brand’s session data to understand what the customer is interested in based on their buying history, browsing behavior, preferences, etc. and deploy messages that will appeal to that specific customer in real-time. Customers receive a personalized web experience that motivates them to complete their purchase and prevents cart abandonment. When used on key conversion moments, such as in the online shopping cart, retailers can see a potential 3-5% increase in e-commerce revenue.
The key is not just getting the behavioral segments right, which is crucial. It is also having the ability to scale your organization’s creative output to create multiple messages geared to the different segments. That’s where Generative AI solutions like Persado come in. It can be as simple as deploying Dynamic Motivation, or our easy self-service Essential Motivation solution, which gives your teams a way to optimize digital marketing messaging across every stage and channel of the digital customer journey, informed by over a decade of data into what works to boost marketing performance for Fortune 500 campaigns.You can Request a 60-day trial of Dynamic Motivation and try it risk free with no commitment to see how you too can modernize your marketing and drive more revenue.