Customers are more motivated to spend money and remain loyal when they have a relationship with brands, but many marketers struggle to maximise the opportunities around personalisation.
According to results from an Edelman DXI and Intuit Mailchimp survey of 2,200 customers and ecommerce professionals in the US and UK conducted in June 2023, many marketers feel they do not have the time or the right automation tools to delve deeper into their data and execute more targeted personalisation strategies.
Hyper-segmentation could be the answer, but the Edelman DXI and Intuit Mailchimp research reveals that although one in three marketers have heard of it, 46% of those in the UK and 34% in the US have yet to use it in their email marketing. One of the reasons is a perception among 76% of those marketers that hyper-segmentation requires a massive amount of data that the marketing team does not have access to.
Yet roughly one in two brands do want to see more personalisation capacities within their email marketing platform. This makes sense considering that the Edelman DXI and Intuit Mailchimp research found that nearly six in 10 customers will continue subscribing to emails from companies as long as they are personalised, even if they’re not purchasing from them.
So what exactly is hyper-segmentation?
Hyper-segmentation is a technique that divides a brand’s audience into small, targeted groups so that marketers can send customers more relevant, personalised content. It differs from other types of segmentation due to its precision.
Jamal Miller, Intuit Mailchimp’s senior director of product marketing, says hyper-segmentation takes one-to-one personalisation to the next level because a brand is having more meaningful conversations with an individual customer or prospect. For it to be effective, a brand must be able to amplify its activity around frequency, channel, timing and other crucial elements such as content.
When it works well, a brand can anticipate what someone might need next, what question they want answered or where the specific pain points are in an individual’s experience.
He cites the example of streaming services such as Netflix that have an in-depth understanding of someone’s viewing preferences and tastes. Netflix uses a ratings system to help ensure future recommended content is as personalised as possible.
Start by getting customer data in order
Miller says the first step is to audit all of the data a business has on its customers. Leaders need to know where the data sits internally to make it easier for the marketing team to access it.
There are AI and data science modelling tools that generate meaningful insight and do not require your marketing team to be specialist data analysts
“We are talking about transactional and behavioural data, customer interactions with different marketing assets and campaigns, and an analysis of how people are engaging with the website or online store, as well as physically with the brand at events,” says Miller. “You then need to connect the dots to get a 360 view of customers and prospects.”
This isn’t easy. The Edelman DXI and Intuit Mailchimp research reveals that 73% of marketers bemoan a lack of expertise on how to hyper-segment their customers. And, related to this, 71% claim not to have the time to explore this as a strategy.
Miller accepts there is a lack of confidence among brands, but there are tools available to help them make sense of their data.
“There are AI and data science modelling tools that generate meaningful insight and do not require your marketing team to be specialist data analysts,” he says. “You can use these tools to drive actions through predictive modelling, for example, and get an understanding of audience patterns.”
He also does not underestimate the human element when creating a robust hyper-segmentation strategy. After all, people should determine how any marketing strategy ties in with the wider business strategy. Humans set the objectives and should determine where automation is needed.
Develop skills within the marketing team
Ideally, the tools a business invests in to achieve hyper-segmentation should go hand in hand with growing its employees’ strategic marketing skills.
A lack of knowledge of hyper-segmentation can mean brands repeat common mistakes when it comes to personalisation and engagement.
“You should not invest in hyper-segmentation until you have identified where the leaks are in your marketing funnel. Are you losing people at the shopping cart stage or are they not coming back to your website?
“I have seen brands jump into launching a hyper-segmentation strategy because they have the data and have the automation tools, but they have not done the middle bit of plugging any leaks.”
Often it is the huge amount of data available that makes such targeting appear overwhelmingly difficult.
“The key is to have a clear understanding of what you are trying to learn, with defined objectives so you are not exposing yourself to every piece of data and getting sidetracked. You need to take advantage of the tools available that make it easier than ever to understand your customers on an individual level.”
Build lasting customer relationships
Understanding customers is only part of the puzzle. Brands also need to engage individuals if they want to build long-lasting relationships. In fact, more than one in two customers will give companies more access to data in exchange for more tailored, personalised content, according to the Edelman DXI and Intuit Mailchimp research.
This only works if a brand can build a connection by demonstrating that it represents something important to that individual customer. The brand needs to convey a personality someone can relate to.
You want customers to be advocates of yours and spread the brand’s message
“You want customers to be advocates of yours and spread the brand’s message,” says Miller. “It is important that this fact does not get lost in the mix of data and tools available. There still has to be that hyper-personal element in all marketing.”
This means the content delivered must be engaging so customers not only consume it, but want to share it.
“Hyper-segmentation means having a clear brand voice so that when someone sees an advert from you or has any interaction, online or offline, they get the same feeling because of the consistent relationship they have with the brand. The businesses that do this well think about this level of personalisation through every touchpoint.”
He adds that more B2B brands are also realising the value of hyper-segmentation. While products and services in the B2B world might be less personal, it’s still humans at the other end who are making the buying decisions.
Hyper-segmentation is primarily about building deeper relationships with individual customers to generate longer-term loyalty. Who wouldn’t want to interact with a brand that understands its customers so well that it can predict what they might want or need next?
Discover how Mailchimp can help you get your email marketing strategy right
