From Market Segmentation to Customer Segmentation: Opportunities for Competitive Advantage and Growth, Part 4
This week is the fourth article in a multipart series on strategies and tactics to help retailers of all kinds find growth opportunities. Specifically, I provide tactics, resources and examples of how product positioning, multichannel marketing, buying cycles, shopping behavior and customer segmentation all represent opportunities for competitive advantage and growth.
- Product positioning: This is how marketers communicate and demonstrate value proposition, features and benefits across channels and markets, while not diluting their brands. Tools include rudimentary analysis of competitors’ products and pricing, and low-cost research on needs hierarchies. Example: A marketer with a high-end product positions its product line based on how it “saves more than other … ,” thus differentiating itself and not having to compete on price.
- Multichannel marketing: Among the benefits of multichannel marketing are increasing cost efficiencies and more effective communications and merchandising. How do you know what channel mix is right? Test across channels and product lines to identify sweet spots. I usually allocate 10 percent of my annual budget for testing, either when consulting or as an employee.
- Buying cycles: Unless a purchase is an impulse buy or repeat purchase, marketers should target the different needs of consumers at different stages of decision making. Although not 100 percent representative, low-cost online visitor research is helpful.
- Shopping behavior: Information architecture, product taxonomy, search, navigation, content and tools let e-commerce stores and websites reflect the most common “user scenarios.”
- Customer segmentation: With the internet, all marketers are direct marketers to some degree. In conjunction with catalogs and direct mail, transactional information email marketing makes it more cost efficient to sell deeper to active customers based on RFM to reduce churn by targeting customers who are showing signs of lapsing, and to reactivate previous high-value customers. Given how important housefiles are to sales and profitability, opportunities for trigger events such as birthdays can effectively increase retention and loyalty. They're important to your ability to compete and grow.
Paul Becker is a marketing consultant. Reach Paul at (702) 587-9011 or firstname.lastname@example.org.