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Audience Segmentation: How Granular Should You Go?

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Years ago, demographics took the lion’s share of an audience segmentation strategy. Brands would rely on high-level data like age, geographic location, or household size as a way to segment their audiences. Technology and data have changed things quite a bit, allowing brands to dive deeper into their customers’ lives and segment them by a range of criteria, such as buying history, lead gen, email open rates, and more. This allows marketers to create highly specific campaigns, offers, and content. But how specific is too specific?

Brands use audience segmentation to make marketing easier to execute and manage. So many decisions a marketer must make hinge on the audience they’re marketing to, from channel to creative to call-to-action and more. Because no two audience segments are quite alike, it’s important for marketers to understand how granular they need to go to target the right people at the right time for the desired outcome. 

The good news: today’s audience segmentation technologies give you more flexibility than ever for defining your target audience.

Going Granular: A Definition

Before we dive into specifics, what do we mean by “going granular”?

We define granular as the level of detail offered by data. The more granular, the more detailed and precise.

In terms of audience segmentation tools, going granular refers to the level of detail used to separate your audience members into various categories. For instance, let’s say you serve customers in the state of New York. A more granular look at your customer base could be to segment by city. From there, you might want to look at customers within a specific ZIP code. And from there, customers in a specific neighborhood or even a single street. 

The idea is that the more granular you go, the stricter the criteria for that customer segment.

The Benefits of Deeper Audience Insights

Audience segmentation illustration.

Learning how to segment audiences in a granular fashion is one of the most essential skills for marketers. Speaking directly to a person’s needs can influence what they buy, how often they buy, how much they spend, and even how they feel about your brand. Research shows that 80% of consumers are more likely to purchase from companies that personalize the experience, while 90% of consumers are attracted to personalized offers. 

Beyond the fact that people like and expect relevant marketing offers, there are other benefits to segmenting your audiences.

Less Negativity

Nobody likes being bombarded with ads and marketing messages, especially if those ads have nothing to do with their interests. In fact, 71% of consumers say they feel frustrated when their shopping experiences aren’t personalized, and those feelings can reflect poorly on the brand delivering them. 

When you improve personalization and relevance through customer segmentation, your audience is more likely to look favorably on your brand. You’re demonstrating that you understand their needs and are creating personalized experiences, which the majority of consumers say they expect.

Lower Marketing Costs

Savvy brands know they don’t have to be everything to everyone. You know that not everyone will want what you offer, or even be able to afford what you offer. And yet many marketers try to get the most out of their marketing budgets by creating ads with mass appeal. On the surface, it looks like a better use of your budget because you can target lots of people in the same campaign. 

But deep down, you may be able to lower your ad costs when you segment your audience. When you know who your target audience is, you can avoid wasting money and time marketing to people who fall outside that segment. Your message becomes crystal clear to the people that matter, and you can get a better outcome on your campaign.

More Opportunities

Segmenting your audiences at varying levels of granularity gives you more opportunities to build loyalty, create value, and drive sales. You discover new ways to connect with your audience authentically and learn more about their needs. Use these insights to support product development, pricing strategies, and marketing promotions to increase sales and engagement. 

How Granular Should You Go?

An illustration of audience profiles.

Granularity can go many layers deep. For instance, if you are segmenting your audience based on age, you could choose to segment by broad ranges (e.g., 21-40, 41-60, etc.) or smaller ranges (e.g., 21-25, 26-30, etc). The latter is more granular because it’s more specific and gets you closer to the customer’s actual age. 

The level of granularity you really need depends on your use case. For example, a CMO of a direct-to-consumer beauty brand might only want broad-level consumer categories, such as anti-aging products, hair care, and acne creams. They need a base-level understanding of their customer base because they have so many other duties on their plates. 

Below the CMO, marketers can break into subgroups of the main customer segments. For instance, marketers might break the hair care segment into different hair types, such as fine hair, natural hair, and curly hair. They can tailor their marketing campaigns to speak to different types of customers with different hair textures and goals.

You might even take it down another layer to target teens and college students, or users that have specific issues like dandruff, tangles, or an oily scalp. Or, if it’s a high-end product, you may need to target customers that have disposable income. 

Taking hair products another layer deeper, you might also look at where your customers live. Those in hot states where humidity is a villain will appreciate a product that preserves their hairstyles under humid conditions. This same messaging might not resonate with audiences that live in colder climates.

Drilling down another layer, you might choose to segment customers based on hair color. If you are using a model with blonde hair, then you could tailor your messaging and creative for customers that have blonde hair.

You can segment even further, depending on how you plan to market your products. For example, if social media is part of your audience segmentation strategy, you’ll need to consider the demographics of each platform to find where your product will fit in. And, if you’re using AI to support your customer segmentation, you may be able to target users that fit all of the above criteria AND have shown interest in switching hair care brands. 

Depending on your marketing budget and audience size, you may even create several different audience segments for the same product. Take a trial-and-error approach to figure out where your most engaged audience segments are. Or, use AI-powered tools to help you identify new ways to segment your audiences.

Is There Such a Thing as Too Granular?

Details matter, but including too many criteria can cause you to miss your target completely. You may get to the point where your audience segment is so small that your marketing investment would be more than any potential ROI. Even with tailored marketing, there’s no guarantee that everyone in your segment will respond to your offer, let alone see it.

There’s also a risk of missing a lot of consumers that may be interested in your offer but don’t fit your super-specific criteria. Going back to our hair care example, if your product isn’t specialized for a certain hair color, then you risk alienating customers that might be interested in your product but have a different hair color.

With every layer of granularity, your customer segment gets smaller and more specific. If you have lots of different products that cater to different needs, you won’t be able to use the same creative across all of your campaigns. 

That’s why most CMOs stick with a broader understanding of their target market and leave deeper customer segments to campaign teams. Your marketing team can segment customers on a campaign-by-campaign basis to ensure their creative and messaging resonate with the right people at the right time.

Striking the Right Balance with AI-Driven Audience Segmentation

An abstract photo of a hand holding various user profile pics.

Artificial intelligence tools are driving a new era of audience segmentation. No longer reliant on high-level demographics or first-party data only, AI tools like Linkfluence’s Tribes analyze millions of topics, keywords, and conversations to learn more about who’s talking about them. 

Using AI technologies like natural language processing, Tribes creates deeper customer profiles of your audience to help you easily find your most activated members. Learn more about what makes them part of your brand’s Tribe, such as their demographics, engagement, and level of influence. Then, use these intelligent insights to create stronger messaging and better products across your entire portfolio.

From lifestyles to interests, buying habits to everyday conversations, Tribes connects you to data you can use. Learn what people are talking about, how they’re talking about it, and who is leading the conversation so you can contribute to these conversations in a more authentic way. Tribes also keeps your customer profiles and segments up-to-date with real-time insights so you can continue connecting with the right people, no matter how much or how quickly consumer preferences shift. 

Find your Tribes when you schedule a demo.

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