Personalization vs Segmentation: Why Segmentation is Not Personalization?

Often people use segmentation and personalization interchangeably. And, why not? Both marketing tactics’ goals are similar: Speaking to your customer in a relevant tone, so that user engagement rates increase.

The need for first person marketing (1:1 marketing experience) has never been this crucial as it is with a tightly-knit digital world. And, this has given prominence to marketing tactics like Personalization and Segmentation among marketers.

Marketing segmentation used to be the go-to tactic a few years ago. Marketers would collect demographic data from users, using which marketers would group them into categories and come up with different user personas. These data could consist of user behavior, their online journey, IP addresses, location, etc. An individual who has a purchase history of vintage products, would have brand communication filled up with more vintage products. Another user, who purchases more electronic products, would have those kinds of product in his or her emails, push notifications, etc.

Sure, segmentation is way better than the older marketing tactic like generic promotional emails or cold calls. But what if your user base is in millions, How can you be sure that all these users will fall under some or the other customer persona developed by you? There will at least be a few thousand users who will show completely different behavior compared to the masses. And it’s important to address them to, here’s why –

With the advent of digital age, the modern shopper, user or customer expects us to solve all their problems. Even if that is related to finding something as small as a pair of jeans. With the world being as connected as possible, most people tend to buy more online than offline. But, they still expect the same treatment as they get at brick and mortar stores.

This is where terms like marketing personalization were coined. A tactic where a brand talks to its customer on a one-to-one basis and treats them as an exclusive part of the brand experience.

Making a sale today is highly based on a brand’s image. People tend to shell out more, if the brand experience is stellar. They don’t mind the price if they are treated as someone important with respect to the brand. And personalization is a way to promote your brand image in that way. It provides a 1:1 experience where the brand directly speaks to the customer using unique data points.

It improvises on what we, marketers have done using segmentation. Now, let’s tell you exactly how personalization triumphs segmentation.

Personalization creates a deeper bond with a user than segmentation

Segmentation is a decent marketing tactic when it comes to providing a good product experience to your users. But, experience based segmentation comes as close as to adding the $$name$$ (let’s take Ryan as an example) to your email’s subject line and then add the same products for a given user cohort.

Such communication with users puts forth a lack of effort, basically your subject is a direct translation of – “Hey Ryan, we know your name and nothing else about you.”.

Personalization on the other hand takes a lot more time, but when it’s done with dedication the results are spellbinding.  A personalized email goes way deeper, with marketing collateral developed in a manner that’s unique and exclusive to every user.

Pro-tip: With today’s AI and Machine learning engine you can automate personalization efforts with these engine doing the task for you on a scale of millions of users.

Sometimes, I take over 30 minutes to tailor and send an email to a customer, and damn it if I don’t break through the boredom of those of generic emails and get a elated responses from the reader!

After such experiences, the benefits are relevant to both parties, the seller and the buyer. I feel I have the best job in the world, and the consumer feels loved and important.

Personalization makes you a first person marketer

Here is another reason why Personalization is better than Segmentation:

It’s your first step toward becoming a first-person marketer.

Another marketing jargon, no, no, no! It’s a fundamentally a totally different approach to consumer communication.

A first-person marketer looks at a list of customers as individual. He or she addresses each and every user different, so that they are entitled to a unique experience.

This is what Segmentation lacks completely, it treats a group of users as an individual and messages loses it meaning with a few users from a user cohort. And therefore, for any marketer segmentation efforts have a higher failure rate than personalization.

On the other hand personalization is segmentation stripped down to the truest of its form.  It’s about tailoring a relevant experience at the most personal and individual level. Personalization allows marketer to focus on things that really matter to most of their customers.

Personalization is a step up from Segmentation

There’s a strong connection between personalization and segmentation. They might be different marketing tactics, but personalization has built upon what segmentation lacked. Without segmentation today, personalized marketing would probably not have seen the light of day.

The right approach to provide user a killer communication experience is a three-step process starting with data-collection and ending on personalization. Personalization can only be implemented into your marketing strategy, only after you have learned segmentation of customers.

Here is a simple step-by-step ascending structure of how personalization is implemented and what are the things that come before one has to implement personalization.

1. Data-collection: The key to both segmentation and personalization on a large scale is to collect and have a robust set of customer data. The richer the data, the better will be your understanding of your audience. It will allow you to develop better segmentation and personalized marketing experience for your users.


2. Segmentation: Once you have gathered enough data, you can start segmenting your users and grouping them under various major personas. The personas will have some type of similar correlation with the data you have gathered.


3. Personalization: Once your audience segmentation has taken place, you’ll have enough data to identify which personas and segments have a potential to adopt to a personalized experience. You start with the most valuable customers and move down the order one-by-one. This enables to retain customers and also promote customer loyalty.

Conclusion

It all comes down to being a smart marketer in the end. Orchestrating your marketing strategy wisely to provide customers and users alike, a 1 to 1 experience of your offering is the ultimate goal of a marketer. Such an experience makes the user feel important and increases their trust on a product.

Moreover, it builds a strong brand image, and helps indirect marketing as well, like word-of-mouth promotion of your product. So, always try to collect user data, segment and finally personalize your user communication to provide your customers a highly effective interaction on all your inbound and outbound channels.