How to Utilize Customer Segmentation to Optimize Marketing Efforts for Increased ROI

Head of Strategic Analytics at Google Marketing, Avinash Kaushik shares in a recent Think With Google article how to become smarter advertisers in 2020. He shared three resolutions that marketing teams should strive to accomplish in this new year.

One resolution that stood out was to become smarter in how metrics are measured. Kaushik shared, “Always provide context for your metrics.” For example, if your paid search ad conversion rate is 55% but the benchmark rate for competition in your industry is 70%—you’re not succeeding as well as you thought you were.

Utilizing customer segmentation can help you to become smarter advertisers in 2020 by more effectively measuring metrics as they apply to all areas of digital marketing.

Improve the ROI of your marketing efforts by implementing the following tips on utilizing customer segmentation the right way.

The Basics of Customer Analysis

Before you implement customer segmentation for your dealership, you need to focus on customer analysis.

The basics of customer analysis include the following:

  • Identifying the target audience interested in purchasing
  • Uncovering the needs of your target audience
  • Pinpointing how your vehicle stock can meet those needs

There are basic categories of customer analysis—a behavioral profile and demographic profile. With a behavioral profile, data is analyzed to see how your vehicles and fixed operations suit the customer’s lifestyle.

With the demographic profile, data is analyzed to identify the varying demographic characteristics of your customer list.

Effectively utilizing customer analysis data can be a valuable tool in enabling your marketing team to better comprehend the needs and lifestyles of your customers.

The potential for increased revenue is greater when you take the time to optimize the way you analyze customers and potential leads.

Dive Deeper with Customer Segmentation

Meeting the needs of your customers and leads will increase revenue. You can drive this increase faster by honing your marketing focus to this target audience.

Take customer analysis to the next level by diving deeper with customer segmentation. This is where you truly get to understand your customer base.

With segmentation, customers are divided into shared characteristic groups such as the following:

  • Customer’s needs and interests
  • Gender and age of customer base
  • Geographic location of customers
  • Lifecycle spending history of customers

The objective of customer segmentation is to pinpoint the customers who have a spending history with your dealership. Then you’ll tailor marketing strategies focused on that segment.

Customer segmentation offers the best results when you are using real-time data analytics to analyze important information and spending history of your customers.

Increase the chances of driving revenue for your dealership by integrating this type of fluid data analysis into your marketing strategy for 2020.

How Customer Segmentation Can Benefit Your Dealership

Maybe you haven’t yet implemented customer segmentation or you’re still not sure that it can benefit your dealership and optimize marketing efforts for increased ROI.

Take a look at the following benefits of how utilizing customer segmentation can positively impact the bottom line for your dealership.

  • Precision Value Assessment – ROI for your dealership can be improved when you use customer segmentation data to gauge current vehicle pricing and identify changes needed to improve sales.

By analyzing real-time data, you can stay relevant to market changes. This enables your dealership to deliver the best value that customers want, while meeting their specific driving and lifestyle needs for their vehicle purchases.

  • Enhanced Strategy for Expansion – The analysis and integration of customer data can help your dealership better plan new vehicle rollouts to meet the projected needs of customers.

As you consistently analyze customer data, you can augment the way you market vehicles and fixed op services through all marketing channels for increased conversion rates.

  • Improved Experience for Customers – The more you can understand your customers, the easier it is to deliver personalized service. This cultivates loyalty and a long customer lifecycle with your dealership.

Customer segmentation enables you to identify benefits that your customers will love to improve their level of satisfaction with your dealership.

As you personalize your marketing strategy with content that is data-driven, you can increase customer engagement on your website and increase conversion rates.

Boost profits at your dealership by understanding interests, needs, and demographics to enable a personalized marketing approach that delivers great results. 

How to Implement Customer Segmentation at Your Dealership

Don’t lose current customers and potential leads simply because you are not personalizing your marketing approach. You may be offering great vehicles and deals.

However, without a personalized marketing approach, you are losing sales.

According to the research and consulting firm, Frost & Sullivan, “the customer experience will overtake price and product as the key brand differentiator by the end of 2020”.

Give customers the personalized experience they are looking for in 2020.

Your customers and potential leads are likely getting such personalized marketing from brands everyday—especially if they are one of the 2.45 billion monthly active users on Facebook or other social media platforms.

These savvy consumers are used to searching on Google, watching YouTube videos, scrolling through social media newsfeeds, and buying products on Amazon—all while being inundated with personalized advertisements on their smartphones, laptops, tablets, and PC’s.

Deliver that personalized experience to customers through an omnichannel marketing approach. You can achieve this by effectively blending customer segmentation and a focused marketing strategy.

Focus on the following ways to implement customer segmentation:

  • Profiling – Analyze data to classify customers into segments based on common characteristics such as purchasing history at your dealership.
  • Tracking – Integrate a tracking system on your website to detect anonymous users and your customer base. You can then create targeted marketing strategies that have the potential to increase sales.  
  • Branding – A user-friendly mobile experience on your website or blog is important. Push notifications and personalized messaging can boost sales.
  • Loyalty – A customer-centric marketing strategy can go a long way toward cultivating loyalty with your customer base. You can use customer segmentation to find customers interested in a customer loyalty program.

Enhance the way you market to your customer base and potential leads by using customer segmentation for increased ROI.

Dissecting the Four Major Customer Segments

Boost profits in 2020 by marketing more effectively to the right customers at the right moment—when they’re likely more susceptible to purchase from your dealership.

Tracking the metrics when marketing to these various segmentation groups can improve your overall strategy. You’ll be able to measure which groups have the best conversion rates and can increase the marketing budget toward that group.

For maximum effect, your customers should be divided into these major segments:

1. Geographic

When using geographic segmentation, you focus your marketing strategy on customers based on the following variables:

  • State
  • Region
  • City
  • Township
  • Neighborhood

One important purpose of geographic segmentation is to set your dealership apart from the competition. For example, when you view the map, you may find that a specific area that you wanted to target is already inundated with several dealerships.

You can retarget another area that is currently not serviced by any local dealerships. This can increase your chances of converting leads when using marketing strategies such as radio ads, direct mail, paid search ads, etc.

2. Demographic

Demographic segmentation of your customers focuses on the following variables:

  • Gender
  • Age
  • Income
  • Ethnicity

This can be important since you’ll be able to identify customer segments that are more likely to purchase simply due to their zip code identifying their possible income level.

As you plan your marketing strategy, only target customers in these areas which meet specific criteria you’ve set. If you decide to focus on lower-income areas, you could change the messaging and share offers for first time buyers or deals for low credit or no credit buyers.

3. Behavioral

When marketing to leads, you are segmenting based on behaviors such as time spent on your website or blog.

If you want to gear your marketing toward customers who have previously purchased from your dealership, you can use behavioral segmentation. Customers will be segmented based upon their buying history.

As you segment customers based upon their behaviors, you’ll benefit from various advantages like the following:

  • Your marketing strategy can become more personalized
  • You can more easily predict future purchasing patterns
  • Your advertising budget will be spent more wisely

4. Technographic

Technographic segmentation is a newer trend in dividing customer groups. You can use this strategy to segment customers into groups based upon how they utilize or view technology.

This can help you improve the way you market to them. For example, maybe more traditional media like television and radio ads would work better in one of these technographic areas.

However, another area might be more susceptible to paid search ads or other more advanced digital marketing strategies like social media ads.

Optimizing Customer Relationship Management

An important factor in ensuring you can utilize customer segmentation to improve your marketing efforts is to optimize your customer relationship management (CRM) system and processes.

If you are not yet working with a digital marketing strategy company, you may want to consider working with one. This company can help you navigate through the right CRM software and understand the best way to segment customers and leads for maximum profit potential.

With the right CRM software, you can benefit from the following:

  • Enhance the leveraging of customer data
  • More easily segment customer groups
  • Implement highly targeted campaigns
  • Reach the right customers at the right moment
  • Reach customers needing vehicle servicing
  • Improve management of teams with cloud CRM

Increase ROI of Your Marketing Efforts with Customer Segmentation

Customer segmentation should be an important facet of your marketing strategy to boost sales at your dealership.

Create an action plan for your marketing team so they can enhance the way they market to your customer base and leads in this new year.

Your customers know what they want and need. You simply need to investigate to better understand them.

The J&L Marketing team can be effective in helping your marketing team excel in implementing these specific strategies to increase the ROI of your marketing efforts through optimized customer segmentation.

More To Explore

Subscribe To our newsletter!

Schedule An Appointment

Schedule Your Event

Get Your Free Political Landscape Analysis

Get A Proposal

View Our Lookbook

Download the lookbook now

Our lookbook has examples of our display ads we have created for clients.