When segmenting customers, it’s important to base your segments on the real-world behaviors of your target audience. While data on digital impressions and clicks from your customers is valuable, data on how customers behave in the real world is much more telling. If you can prove that your ad campaign drove customers to visit your store, that is really powerful.
Using Offline Intelligence to Segment Customers
The key to attributing campaigns based on real-world actions is offline intelligence. By measuring the incremental impact of your campaigns in the offline world, you can see how your campaigns are actually changing consumer behavior. Advanced offline intelligence solutions now provide the ability to measure incrementality at the consumer level, which can enhance your segmentation and targeting strategies. Incrementality at the granular level enables you to understand a campaign’s impact on different types of consumer groups, so you can drill down on how each channel influenced consumers differently and target them accordingly.
Building Audience Segments Based on Incrementality
With visit incrementality at the consumer level, you can hone in on campaign performance to differentiate between loyal consumers who would have visited your store regardless of advertising and those new visitors who were influenced by your campaign. You can divide consumers into four key buckets based on their value to your brand:
1. Loyal Audiences
Let’s start with the Loyal Audiences, or those who had high loyalty to your brand prior to your campaign and were not influenced by your advertising.
For example, this bucket could include a group of Dunkin’ loyalists who were not swayed by the new Impossible Sausage Breakfast Sandwich offer. They continued visiting Dunkin’ just as much as before the campaign and were not receptive to this new messaging.
This might be a good segment of customers to target with messaging for a loyalty program, to recognize the loyalty of these customers and offer them customized deals to increase their value to your brand.
2. High-Value Audiences
High-Value Audiences are similar to Loyal Audiences in that they have demonstrated high loyalty to your brand prior to your campaign. However, the key difference with this segment is that they were positively influenced by your campaign to visit your stores.
For example, this group could include consumers who frequently visit Starbucks, but who wound up seeing an advertisement for the latest seasonal drink and then visited a store because of that.
This is a great segment to target with new offers, as these customers are already loyal to your brand and would be likely to buy your new products once they learn more about them. Furthermore, this is a strong segment to retarget or build look-alike models from in order to drive similar customer behaviors.
3. Low-Value Audiences
While Low-Value Audiences might not sound super appealing to target, they can reveal key insights for your brand. This is the segment of consumers who had little to no loyalty to your brand prior to the campaign and were not influenced by it.
For example, this bucket could include consumers who normally don’t visit Sephora stores despite seeing ads for them. While this segment was not responsive to Sephora’s messaging the first time around, it does not mean they never will be in the future. For example, what if one of those consumers wanted to buy perfume as a gift? If they’re not very familiar with makeup stores, where they go will be based largely on their awareness of beauty brands. Since they’ve been exposed to Sephora ads, those types of consumers are more likely to purchase the perfume from a Sephora — assuming they haven’t seen ads for other beauty retailers.
In this way, targeting this segment with more generalized ads with the goal of brand awareness can eventually convert customers in this group to buy. However, of the four segments discussed in this blog, this is the least valuable for your brand to target in the short term.
4. High-Potential Audiences
Finally, let’s consider High-Potential Audiences — perhaps the most lucrative segment of consumers for your brand. This is the group of consumers who had low or no loyalty to your brand prior to your campaign, but who were positively influenced by it.
For example, let’s consider a group of people who have no loyalty to pharmacies — they’ll visit a Duane Reade or CVS equally, based on whichever is more convenient. After they saw a campaign for CVS’ HealthHUB locations, they visited a CVS location to pick up some toiletries.
This segment presents an excellent opportunity for targeting, as they are potential new customers who are very receptive to your messaging. This is a great group to retarget or build look-alike models from, in order to access groups of like-minded new consumers who might be influenced to purchase from your brand.
Increasing Customer Lifetime Value
Ultimately, you want to maximize the value from all of these buckets. These segments of consumers are not immutable — ideally, you want to move customers up the value chain into different buckets, to increase their lifetime value to your brand.
As follows, you want to convert low-value customers into high-potential ones, convert high-potential customers into loyal ones, and eventually turn loyal customers into high-value customers. It’s all about maximizing customer lifetime value.
In a competitive market, incrementality can help you increase your piece of the pie — maximizing the number of customers who will shop at your brand.
Start activating audiences based on incrementality today by connecting with one of the experts on our team.