Driving Results With Customer Segmentation Marketing

Mike Farrell, senior director of integrated digital strategy at performance marketing company Sidecar, sees Generation Z as a huge opportunity for brands and retailers to reach simply because mobile devices are embedded in this demographic cohort’s everyday life.

Here, Farrell discusses how brands and retailers can connect with Gen Z with the right marketing and tactics.

WWD: With consumer behavior radically shifting and a new generation of shoppers joining the landscape, why is it important for brands to prospect this younger demographic?

Mike Farrell: As consumers move from one phase of life to the next, their disposable income, buying behaviors and purchase priorities change. Retailers must continually understand which demographics are core to their business today and which demographics will be core tomorrow. Right now, Gen Z is a current or up-and-coming target audience for many brands. Fortunately, there is tremendous opportunity to reach these consumers because they thrive on digital experiences; have high levels of engagement with online advertising; and — for footwear brands especially — are extremely plugged into fashion trends and fads.

Smart customer segmentation is the best way to allocate budget to the highest-intent audiences and drive the strongest results. Additionally, while creating relationships with these younger shoppers early on can help build brand loyalty, these shoppers can be easily swayed by the next best thing. Brands must constantly find ways to remain relevant to these shoppers as their interests change.

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WWD: The “battle for customers” begins a lot earlier than some brands realize. Where in the customer journey should they be turning their attention to ensure they’re not too late to the fray?

M.F.: Addressing the battle for customers starts with you as a brand. It’s critical to know your core customers and what they value — before you prepare to compete for their attention and deploy marketing dollars. In many cases, we see that consumers prefer certain elements in a brand experience when shopping. As a baseline, most consumers generally look for discounts and free shipping.

In addition, other elements that can help build brand interest and confidence include strong product and store reviews; smooth checkout and web site experiences (particularly on mobile); loyalty programs; and social consciousness messaging. Determine what is most important to your core customer and build it into who you are as a brand.

WWD: Targeting messaging is a familiar concept, but how can brands ensure that they are targeting the right categories and at the right scale?

M.F.: Audience segmentation is critical to developing targeted messaging. Evaluate your customer segments and the KPIs that characterize them. What segments are driving higher traffic? Which are converting better? These are key questions to answer to then map budgets appropriately to each segment. This exercise might sound obvious, but many brands struggle to do it well. Once the audience segmentation is decided, you can determine how to customize your messaging to each group. A/B test various messages to determine which “calls to action” and imagery resonate with customers — and drive results.

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