By Jeanne Roué-Taylor
Applying analytics to your marketing is one thing, but utilizing actionable analytics is quite another. Making analytics actionable is a matter of having great segmentation that establishes the playing field for those moments when a marketer needs to act or react to the customer. Without segmentation, real time isn’t a realistic expectation for your customer interaction.
Defining Segmentation the Right Way
Just like analytics, segmentation depends very much on having the right data and using that data correctly. Effective segmentation starts with at least three levels; for example, segments of customers, segments of products, and segments of stores.
As an example, getting customer segmentation right may involve knowing buying frequency and product types as well as demographic data such as age, gender, income, and even proximity to store.
Products can be segmented by category, of course, but also grouped by what’s typically purchased together and by the customer segment known for buying the products. In this way, both customer and product segments are tied together.
Stores are commonly segmented by the composition of products purchased, type of store, and neighborhood demographics (therefore linking back to both the customer and product).
Putting Segmentation Into Practice
The rubber truly meets the road in how segmentation is applied. Just as there are multiple levels to segmentation, there are also multiple uses for the segments teased out of data. Segmentation can be about having better core knowledge and insight, personalization and more targeted marketing, customer cloning, influencing the customer journey, creating a path to profitability, or for top-down marketing.
The Power of Propensity Models
Another way to make sure analytics are actionable is to have great propensity models. These models are a mathematical representation of the likelihood of a segment to exhibit a certain behavior, including abandoning their cart, buying multiple items together, or simply responding to an offer. Propensity models are built to allow scoring and predicting that allows marketers to respond quickly, through the right channel, in a changing environment—a real challenge in our mobile, always-on world.
The Psychological Router
The last piece of making analytics actionable is considering the end-to-end system as a psychological router, constantly measuring and influencing the customer in ways that create a synergistic relationship. Done well, the psychological router is a virtuous cycle that starts with the initial propensity model and takes constant input to continually refine and improve marketing performance (see diagram below).
Only when segmentation, propensity models, and the psychological router are in place can marketing truly make analytics actionable.
To learn more, download the whitepaper, Real-Time vs. Right-Time Marketing, Determining the Best Time to Market, and register for our webinar on Wednesday, September 24, to see the new TIBCO Engage platform for marketers in action.