Data segmentation can help you decide the future of many facets of your business. We can help you get started.
In about four months, people across the United States will be opening envelopes inviting them to take part in a decennial tradition: the census. The census collects data from everyone living in the United States for a variety of purposes.
What the government is doing is beginning the process of data segmentation.
As a business, you’ve no doubt heard about data segmentation, but maybe you don’t know where to begin, or maybe you’re not quite sure what it is.
What is data segmentation?
Data segmentation is when you take a group of people (in this case the people who interact with your business) and group them based on certain categories of data to better understand your buyer personas, target your marketing, and improve sales efficiency.
Below, we’ll get a little bit more in depth on what data segmentation is, as well as what it can do for your business and your marketing strategy. We’ll also outline the basics of how to collect all this data.
Data segmentation 101
When you implement a data segmentation strategy, what you’re essentially doing is categorizing. You collect information on all of your clients and your leads and sort them into different categories.
From there, you can notice trends within different categories. For example, you might find that solopreneurs in their 40s explore your website for longer than enterprise buyers in their 60s. This will give you key insights into how to approach business decisions across the board and provide you with guidelines for actionable strategies.
A few examples of types of data you can use for segmentation include: the size of the business, the age of the lead, and the time they spend on your website.
What can you use data segmentation for?
Whether you’re a small or large business, data segmentation is crucial to helping your company reach its fullest potential.
It impacts a lot of different segments of your marketing strategy and can also impact your product, sales, and customer retention.
Take a look at the infographic below that outlines all the ways data segmentation can help your company, and then we’ll talk about how to start the process.
4 steps to collecting and segmenting data
So now that you have an understanding of what data segmentation is and what it can do for your business, how do you get started?
1. Develop a system for data storage
First things first—you’re going to be collecting a lot of data on your customers and leads and you need a place to organize it. Even if it’s something as simple as a spreadsheet, you need a system that allows you to store and sort through your data.
Of course, you don’t have to resort to a spreadsheet. You can invest in a data management tool which will typically allow you to store and sort through your data.
However, if you’re not ready for that just yet, that’s OK. Bookmark that link and save it for later.
2. Set a goal for your data collection
Though data segmentation can accomplish everything mentioned above, it’s always helpful to have a very specific goal in mind.
This can help you make decisions about the data you need versus the data you want, the way you collect the data, and the way you phrase your questions.
For example, if you’re looking to improve your product design, you would focus your data collection on customers and leads who are further down the sales funnel, and your questions would focus on their interaction with your product, such as the features they primarily use it for and how often they use it.
3. Find a data collection method that works
Depending on your goals, you’ll need to come up with an effective means of collecting data.
You could use surveys sent to your extant customers or require that leads fill out a short questionnaire in order to download a demo or tutorial of your product.
You can ask single questions or create polls in Twitter posts, or you can use email marketing to reach your targets with a longer list of questions.
The big thing to remember is this: Track the success rate for your data collection methodology. Maybe it works for certain groups of respondents but not others, or maybe it’s simply not working. If you need to make adjustments, test out any new methodology with various groups to see what changes work and which ones don’t.
Segmenting your data collection will ultimately keep you from wasting time and resources in the future.
4. Go through your data to see what matters and what doesn’t
Let’s say you’ve collected a lot of data. Only you can be the judge of how much that is, but you want to have enough that a few outliers (people whose responses are far outside of the norm) don’t throw off your analysis.
Now you should break down your data by the categories of data you’ve collected, like the location of the business, the industry it’s in, the average age of their business and tech decision-makers, etc. Depending on the tool you’ve chosen to manage your data, the process behind this will be different.
However, you’ll soon be able to see which categories are impactful and which are not.
For example, you might find that the customers who rate you on the low end are the people who primarily use your product as a collaboration tool, while customers who use your product as a project management tool rate you highly.
There could be a correlation between industry and frequency of use, or there could be none at all.
Having that data, though, can help you make informed strategy decisions about where to go next in order to achieve your marketing goals.
What to do next
As you continue to build out your data segmentation strategy, take a second to read the below articles on more ways you can use and analyze data and the types of data you might find most valuable.