This article applies to all paid subscriptions (Customer Data Studio is not available on Free subscriptions).
Great businesses understand who their customers are, and Customer Segmentation is one of the most important tools any business has at its disposal. Segmentation is at the heart of many business fundamentals, yet it can be quite complex to implement and so this vital technique can be overlooked.
Segmentation starts by grouping Customers into their common attributes. With this done you can look at these groups for common traits, measure how this impacts your business and then respond accordingly. For example, what does a high value customer look like compared to a low value customer? It often follows that if we had as many high-value customers as low value customers, would we be more profitable? So what do our high-value customers look like? What is their leading purchase, what marketing source do they come from? Are they from a geographically similar area and so on.
Using Customer Segments you can answer these questions. But of course Segmentation can do far more than just answer questions. It can also be used to personalise the experience for the Customer. Personalise marketing message to contain content that is relevant, but also personalise the flow of customer interaction - for example help move Customers through stages in the conversion process, from first interaction to a high-value and loyal advocate. And of course in doing this you start to touch on the design of your Customer Experience.
Why Customer Segmentation?
A Customer Segment is just a collection of Customers that share similar characteristics. These characteristics can be just about anything, let your imagination run!
Note: we say similar characteristics here to mean customers that have something in common, but when you start creating Segments, you will use Attributes to help define a Segment.
However, as the whole purpose of segmentation is to deliver actionable insights, we'd suggest choosing characteristics that are meaningful to your business. This could be the types of product your Customer buys, their geographic location, or other useful characteristics.
Some segmentation attributes are almost universal, and are useful for most businesses (for example sales volumes). Distil comes with a set of AI Segments with useful characteristics that you can use out of the box. If you are new to segmentation we'd suggest having a look at these as a first step.
As the purpose of segmentation is to provide actionable insights, it's often helpful to start with the outcome in mind, and then build a Segment to support that outcome. Let's say that an increasing number of your Customers make one purchase and are never seen again. You may want to identify these Customers as a Segment, and apply a strategy to get them spending more regularly such as special offers.
It's also useful to know what you want to do with a Segment. Are you oversubscribed and want to shrink low value customers? Or, do you have a churn problem and want to grow the loyal Customer Segment?
Customer Segmentation in Distil
Distil puts Customer Segments at the heart of analytics activity, delivering easily actionable outcomes with a few clicks. Segments work hand in hand with data Enrichments.
Segments can be viewed within Distil on the Customer Data Studio screen by selecting Segments at the top of the screen (this view is opened by default when the Customer Data Studio screen is opened). The Segments are listed on the left side of the screen, along with key attributes such as the sync status, the current number of Customers, 30 day change in Customer count and Segment revenue value. The list of Segments can be searched, sorted or filtered using the controls above the Segment list.
Select a Segment to see analysis of that Segment in the panel on the right. By default Segments opens showing the Analytics Panel, however you can also dive into the detail by selecting the Data Panel.
The size and revenue value of Segments can be monitored within Distil. Each Segment’s Customer records can also be dynamically synced with other platforms via Distil Destinations. Read the section below for an overview of actioning Segmentation insights via Distil Destinations.
It's important to understand that a Segment can be Private or Shared. Private Segments can only be viewed by the user who created them, while Shared Segments can be seen by any user who is signed in to your Distil account. Only Shared Segments can be used to sync with a Distil Destination.
Actioning Segmentation Insights
While you could take action on the insights in Distil by opening a bottle of champagne because you've just hit your target for a Segment, more typically you will want to communicate with these Customers or take some other action.
Distil supports a range of data sync options for getting your insights into emails and reports, whether this is a sync with your database or a mailshot via one of our growing list of Integrations.
Remember that only Shared Segments can be used to sync with a Distil Destination.
Also, if a Segment is used in a Destination that is set to Auto-sync, that Segment will be locked and cannot be edited. If you need to edit the Segment, first tun Auto-Sync off, then edit the Segment, and turn Auto-Sync back on. This is explained in more detail in our article on Destinations.