Five Reasons Why Segmentation = Revenue

March 10, 2014

Whether you call it Big Data or Deep Data,  combined with little data, it’s the name of the game for online publishers.  But, data is only data, unless you do something with it.  That’s why we start by using it to segment our audiences. 

Segmentation: Simply put, segmentation is the act of dividing your audience into groups, based on certain criteria. The members of each group must have at least one quality in common with other members of the group—and that is what sets them apart from the other groups. 

Originally, segmentation was about converting visitors to customers. However, in the context of digital publishing, it’s no longer just about conversion, it’s also about retention. Segmentation involves making sure members of each group have several factors in common—because it is really about targeting and the more targeted your content, the more likely you are to engage your audience and that engagement means revenue.  

Really, it comes down to relevancy or contextual awareness. Your audience has likely evolved to expect a personalized experience on your website from their point of entry all the way through to a highly-customized purchasing experience. And, they’ll expect something even better on the return trip. 

Where do you start? It’s important to remember these basic but very important categories to begin with.  

  • Demographics

  • Location

  • Psychographics: this is about personality, attitudes, values, interests and lifestyles. 

  • Media and Mediums

However, for a publisher, there are certain categories that will help you hone in on your audience in a way that helps create a deeper experience.  Of course, other categories that are even more specific to the audience you serve will emerge and inform you.  But start with these:

Content Preferences: Do they often view articles by a certain writer or on specific topics? Do they prefer weekly or monthly newsletters?

Purchases: What are they purchasing? Are they focused on products or services? Are they buying what is offered around a specific area of expertise? How often are they purchasing?

Subscriptions: Obviously these tie to purchases, but they are more specific. Are they going for free or paid subscriptions? What method of delivery? How frequent? Are they really engaged with their subscriptions? Or are they only sometimes accessing what the subscription offers?

Site Behavior: What are they reading? How much time are they spending? What offers and features do they respond to or interact with?

Let’s look at why segmentation translates to revenue:

  1. Avoid Becoming SPAM. If your eNewsletter ends up in their spam folder, it will never see the light of day. It’s just a fact that your audience will add your marketing emails to their spam folder if they don’t find the content relevant. They may like your company just fine, but they aren’t going to waste their time reading something that isn’t useful or interesting to them. Segmentation increases your chances of hitting your mark and your audience will be more likely to subscribe, when they see the relevance.
  2. Serve the Individual. For the publisher, content will always be king, and most will argue that the best content holds a single reader in mind. Segmentation allows you to hone in on that single reader—without having just a single reader in your audience. You can reach more people, more personally.
  3. Meet Them Where They Are. Modern segmentation (and mobile responsiveness) allows you to identify where your readers are at any given moment and deliver the most relevant content to them. Say their visiting Chicago and you happen to be holding a seminar there—well they might just attend, if they know about it. 
  4. Provide More Options. The better you know certain segments of your audience, the better you can meet their needs and give them the options they are looking for. You may find that a certain group wants a subscription that delivers content to them every two weeks. Before, when you didn’t offer that, there’s a good chance that people in that segment just wouldn’t subscribe. By offering a new option, you’ve gone from $0-$100.
  5. Turn "Deadweight" into New Customers. If you look at your list in the light of segmentation, you might see common behaviors among those who have done nothing beyond registration. First, this allows you to see who needs more opportunities to engage and second, it could provide a clue for how to best do that. This is the part of segmentation that is about conversion, which is still a key activity. You can experiment with when and how you attempt to reengage this segment of your audience. By testing out your approach, you gather more data which equates getting to know them just a little better. You might find that the channel doesn’t work—so instead of emails, perhaps you try through social media. Or maybe you change the package or offering. What they ignore can be as telling as what they engage with. Use it to your advantage—it will help you not only with those who are already on your list, but also with finding more effective ways of engaging new registered visitors right off the bat.

Sometimes we can get caught up in all the numbers and wonder why we are doing it, but then, when we step back and remind ourselves, we realize it’s about the other numbers—those with the $ in front.