From behind, a young woman works on a laptop screen in a black and white image highlighted by rainbow bands of color to illustrate automated customer segmentation

How to Use Audience Segmentation to Win Prospects and Customers

Curious how to use automated customer segmentation for better results? Get practical tips and examples on every aspect of the process.
Article Outline

You’ve heard it before, right? The age-old advice, “If you’re appealing to everyone, you’re appealing to no one…”

And it’s true. But even if you’ve carefully designed your ideal customer profiles, you can still go deeper in your targeting, helping your prospects feel known, understood, and aligned with your products and services. How? The answer is: audience segmentation.

It’s a complicated process, but understanding the concept, what it is, why you do it, and having a great example (we’re sharing our favorite!) can set you on the right path.

What is audience segmentation?

Audience segmentation is the process of dividing a large group of prospects or customers into smaller segments to provide more relevant messaging and communication to each segment. When you segment strategically, you can better persuade prospective buyers using the topics that are most relevant to them.
For example, let’s say your company sells project management tools. Your prospects may have many interests, such as task organization, team collaboration, or budget management. As a result, you could use audience segmentation to group people based on their specific interests.

A businessman walks down a well lit corridor with a briefcase, in black and white accented by rainbow lines, illustrating the idea of audience segmentation
Audience segmentation takes your segmentation strategy to another level of sophistication.

Why is audience segmentation important?

Audience segmentation is important because it helps improve marketing results. 

Research shows that organizations using segmentation report earning 10% to 20% more in revenue and increasing their conversions by up to 50%. That’s not bad, right?

And logically, it makes sense. If you’re interested in cooking, you might open an email about cooking. But if you’re interested in the subtopic of barbeque recipes, you’re probably much more likely to hit open. Why? It’s more personalized to what you need. And because of this personalization, you’ll capture the advantage of more effectively persuading buyers.

 As a result, when your competitors push out generalized messages, you’re getting cozy with prospects under their noses by zeroing in on their specific needs and interests. And who do you think they’ll consider more seriously when shopping for a new solution? That’s right, you!

Types of Audience Segmentation

As you consider audience segmentation, you can approach it in many different ways. You might decide to segment based on demographics, such as job title. Or you might decide to target based on interest or stage in the buyer’s journey (a couple of our favorites, by the way). Here are a few potential options:

Demographics. With demographics, you group by common audience attributes, such as age, job title, geography, education level, and more.

Industry. You can also segment based on detailed information about a company, such as annual revenue, organization size, growth rate, and more, aligning with your ideal customer profile (ICP) or target market.

Behavioral elements. As your audience engages with your content, you track their behaviors. A marketing automation segmentation tool is great for this task. Examples include website activity and purchase behavior, allowing you to determine your audience’s needs.

Interests. A prospect might read a blog post on lead generation, attend a webinar, and read an eBook on the same topic. These touchpoints signal a strong audience interest in lead generation, so you can use that data to segment the audience.

Buyer’s journey. Every prospect interacting with your brand is at a specific stage in their buyer’s journey, which typically includes awareness, consideration, and decision. We can segment them based on their place in the journey to provide personalized communication and content.

For example, a prospect in the awareness stage might enjoy helpful tips for solving their problem. A person later in their journey, such as consideration, might enjoy a guide about evaluating solutions. During the decision stage, that prospect might enjoy a webinar or demo about how to use your specific product.

Here at Act-On, we experiment quite a bit with automated segmentation. In the past, we’ve used ICPs, but more recently, we decided to switch things up and segment based on interests and the buyer’s journey stage. The difference in results was significant.

Tip: Do you already have Act-On and want to see how to build a segment? Here’s a complete walk-through.

A young woman holding a laptop speaks on a cellphone in black and white with rainbow colored bands, illustrating the concept of audience segmentation
Audience segmentation is all about understanding and reaching potential customers at scale.

A real example of segmentation

Ready for a real example? Last year, we experimented with our lead nurturing programs. With these programs, our audience might consume content (like you’re doing now), download a helpful resource, and enter a lead nurturing series where we continue to provide value.

Our internal expert, Kesley Yen, decided to take a fresh look at these programs and see whether we could get even more personalized. While in the past we segmented the audience based on ICPs, she decided to segment based on interest and stage in the buyer’s journey.

After only six months, the results were excellent.

With the previous program, we averaged a 25% open rate in our programs. The click-through rate was 1.3%, and we had a 1.4% opt-out rate. With the new program, the open rate jumped to 48%, the click-through rate increased to 17.9%, and the opt-out rate was roughly 1.2%.

So, yes, aligning with your ICPs is a great start. But the more personalized you can get, the better. That’s why it’s helpful to use audience segmentation based on factors like interest and stage of the journey to get even more specific in the needs you’re serving and build stronger, more meaningful relationships.

Good marketing starts with great audience segmentation

Until we teach AI to buy products, your audience will continue to be human, with human interests and human behaviors. They will do what serves them best. And when you make your interactions more valuable through audience segmentation and personalization, you align with those ‘best interests.’

Your audience will be more likely to want to hear from you, read your content, and eventually become customers. And because of the synergy you’ve created with audience segmentation, you’ll have far less friction along the way.

So, remember:

  1. Decide how you’ll segment your audience (demographics, industry, behavior, interests, buyer’s journey, etc.).
  2. Segment them into appropriate groups.
  3. Create content, experiences, and interactions that meet their needs in order to nurture stronger relationships.

And if you need help learning how to gather data to segment and nurture more effectively, we’ve got you covered with an on-demand webinar that covers all the important details.

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