Segmentation Excellence Now that Everything Has Changed

• Customer Analytics

Taylor Swift and Ed Sheeran released a song in the summer of 2013 called “Everything Has Changed.” It’s a cute guitar ballad about how life is better with a new love and it is one of my favorites from Swift’s 2012 album, Red.

I’ve been humming the song quite often recently because if there is one thing we all know about 2020, it is that EVERYTHING has changed.

We’re eating out less. We’re flying less. We’re making fewer trips to the grocery store. And when we do go to the store, we’re spending more on each visit. We’re improving our homes and spending more on sporting goods.

To this latter point, I rode my bike up a mountain near my home the other day and when I got to the top, I overheard a group of hikers talking about how much they wish they had a bike. One of them commented that she told her local bike shop to call her as soon as ANY bike came in. She doesn’t care if it isn’t her size or top color choice. She just wants a bike.

Another bicycle example. I was picking up my mountain bike from a tune-up the other day. As I was leaving the shop, I overheard a man express interest in a bike for his son. “I’ll put your name on the list,” said the owner of the shop, “but I can’t guarantee when we’ll have something for you. Our supply is just so low right now.”

A few things stood out to me about these experiences –

1. Bicycle customers are not price-sensitive these days.
2. Both the hiker on the top of the mountain and the man at the shop actually called or visited their local shop. These were not email or web browsing experiences.
3. I have five, two of which I’ve been meaning to sell. Maybe I should finally do something about that. See A).

When it comes to marketing to distinct customer segments during the pandemic, consider starting from what you know and evolve from there. Your pre-pandemic segments may have had names like New to Brand, Holiday Shopper, Likely Leaver or the tried-and-true Zip, Age and Gender. These segment concepts remain valid. But the needs of the people who make them up have changed. Be ready to either lead that change or follow.

Take, for example, a CPG company. Consumers are accustomed to buying at the grocery store, but several CPG companies are starting to sell direct to consumers or via marketplaces like Amazon. While these consumers are not new to the brand, they may be new to the CPG company’s customer file, since they were previously unknown. If these consumers are looking to avoid trips to the grocery store — and the data says they are — bring them to your brand through targeted social and search advertising. Incentivize them to make themselves known by offering information and community related to the use of your product throughout the product lifecycle. Make sure your account setup and authentication processes are both secure and simple. Cookies are losing their reliability, which means you need to make it advantageous and easy for your customers to self-identify. Savvy brands are taking this full experience approach.

Don’t forget to test and learn over time. Accept, embrace even, less than perfect sample sizes, as Dr. Elea Feit of Drexel University encouraged us at Course5 Compass in May. She has titled her work “Test and Roll” and provides a mathematical justification for why you don’t need a perfect sample size if your goal is simply to increase sales.

In summary —

• Don’t throw away existing segments – build upon them. Change with consumers.
• This is the perfect time to experiment with the omnichannel balance that is right for your brand! Customers still crave and require in-person, in-store experiences, but now they expect more digital interactions in addition to store experiences – as long as those experiences allow them to maintain social distancing.
• Make it easy and desirable for customers to make themselves known – so you understand how they are changing and can keep in step.
• Test and learn – even when sample sizes are low.

These principles apply mid-pandemic, and they will surely continue to apply as we emerge from the pandemic as well. In all phases, be sure to step back from the daily grind of your marketing calendar to put the fact that Everything has Changed to work.