When to Refresh Your Audience Segmentation? (Note: It Doesn’t Have to Be Tied to the Calendar Anymore)

When to Refresh Your Audience Segmentation? (Note: It Doesn’t Have to Be Tied to the Calendar Anymore)

By Mark Ailsworth

Marketers…have you refreshed your audiences since the start of the pandemic?

If not, then how can you feel confident your marketing will deliver the results you need it to deliver?

Even if you have, are your segments robust to different states of pandemic restrictions in their areas?

After all, the way you segment your audience is the way you see the world. Thus, if your segments don’t really match the reality of your audiences, your marketing won’t be as effective as it can be. It’s like talking to a group of Moms as if they are a group of Dads. Yes, the message will get through, but it won’t land as well if it doesn’t reflect what’s actually true in the market.

For many marketers, segmentation has generally been an “every now and then” practice. Whether it was once every year—or even every two years—segmentation refresh cadence was infrequent because of a variety of factors:

  • It wasn’t cost-efficient. The mostly-manual analysis of the past was too expensive to do often.
  • It wasn’t fast. Segmentation number-crunching and insights-building took months, so doing it more often than annually just didn’t make sense.
  • It wasn’t self-service. Today’s segmentation—like what we have a simMachines—offers a SaaS platform for marketers to do it themselves, whenever they would like to. And the technology can be run by regular practitioners, not just data scientists.
  • Not as many signals as today. The amount of data that segmentation analysts had doesn’t compare to the big datasets we see today. With the rich signals available, these models can be smart enough to build accurate segmentation models more often.

So, When to refresh? That’s the million-dollar question around segmentation and one I’m often asked by marketers. Well, one thing that is true now is that you don’t have to tie your segmentation to the calendar anymore. New innovations in artificial intelligence and machine learning have made the segmentation process less expensive yet faster than before—sometimes completing in minutes or hours what it took weeks or months to do in the past.

So, in this new world of on-demand segmentation, how could this change the game for marketers?

Three options for marketers to refresh their audience segments

Marketers, imagine you could press a button and refresh your audience segmentation…how often would you do so?

There is probably a myriad of cascading decisions that you have to make when you change your audiences: media mix, messaging, and maybe even your goals. So, it’s more about how fast your marketing can re-align to new segmentation rather than waiting for an annual or biannual refresh.

Here are a few ideas:

Segment refresh option #1: Quarterly

Certainly, the world changes with the seasons. And for marketers, the marketing calendar does seem to overlay well with a quarterly cadence.

Fashion marketers certainly see completely new product lines each quarter. Travel marketers juggle the summer family vacations, fall holiday travel, the warm-weather seekers in the winter, and new beginnings in the spring. Retail marketers certainly have to adapt—bathing suits and suntan lotion in the summer, big coats, and hats in the winter.

Quarterly also might be the right timing for the marketing team as well. With new audiences, certainly, new messaging and promotions must be developed. Redoing all of these things any faster than quarterly could overtax the team.

Pros of refreshing quarterly: Change with the seasons. While some businesses aren’t impacted at all by this level of seasonality, many companies would benefit from this cadence.

Cons of refreshing quarterly: New audiences means that a lot of marketing would have to be rethought…ads, media placements, etc. It might be too often for the way that marketing works today.

Segment refresh option #2: By Promotion

Instead of aligning to the calendar, marketers may want to better align with the overall cadence of the business. Many businesses’ bottom lines are based on how well their big promotions do. Take, for example, the automobile industry. Every fall, the new cars arrive and it’s incredibly important to make a big, impactful splash with marketing. What if your audience has shifted dramatically since last year? This year’s lineup might be skewing more towards families and away from unmarried people than you ever have. Or, maybe your new, inexpensive electric cars are finally ready for the masses during their purchase consideration phase?

The key to winning customers is truly understanding them so that you can market and engage them better. Aligning new segmentation to the reality of the world in anticipation of your big promotional period might be just enough of a competitive advantage to protect your loyalists and bring over new customers.

Pros of refreshing by promotion: The handful of big promotions that brands run each year tend to be very critical for success. By resetting audiences before each promotion, they might be able to maximize the opportunity.

Cons of refreshing by promotion: Same as quarterly…can your marketing team keep up?

Segment refresh option #3: Whenever it’s needed (simMachines’ software enables this!)

Ultimately, the right option seems to be that marketers should refresh their audiences when they need to. What does this mean? simMachines can continuously check your data to detect when customer behavior diverges from what is described by the current segmentation.

Using explainable machine learning, we can figure out best when and if you need to change your model. Knowing how the people who are visiting your location are changing over time can even be automated so that it doesn’t have to be marketer initiated. You simply get a notice that one or more of your segments are not as relevant anymore and these new segments should replace them in priority.

Some of our clients even want a daily refresh of their segmentation. That’s right. Daily. For example, we work with a global financial company that has enough data to drive new segment categorization for tens of millions of consumers. They use this to re-score promotion recommendations at the person-level every night to drive customized campaigns the next morning.

But knowing that you don’t have to change segmentation often could be extremely beneficial too. 

Maybe you don’t need to even refresh them this year because your audience is basically the same as the previous one—or you just have a few new segments to add? Knowing this would be a big win for your marketing organization so that they don’t have to rip and replace all of the hard work they did? Maybe the media and creative teams really nailed it last year? The old adage if it ain’t’ broke, don’t fix it could absolutely apply.

Also, having the previous year’s success to build upon could be valuable. Your teams have spent a year monitoring and tracking these audiences, doing research, testing ads, measuring reach, and defining optimal frequency. Not having to arbitrarily change audience targets means that this year your team can engage your audiences even better!

Pros of refreshing when needed: Change with your audiences (as it should be!)

Cons of refreshing when needed: It will require a new marketing process to pivot at irregular intervals.

Marketing should evolve to handle a custom segmentation refresh cadence

Marketing has had to adapt and change to the times throughout its history. Radio—and then TV—changed everything. In the 70s, direct mail went through a major revolution to highly granular targeting. Then it was cable television that rocked the industry in the early 80s. And certainly, the marketing world will never be the same since the rise of the Internet, mobile, social media, and streaming video.

Ask the companies that didn’t evolve to the times how they are doing now…chances are that they are either out of business or struggling—when’s the last time you spoke to a travel agent or visited a Blockbuster Video? So, to ask marketers to change how and what they do periodically should just be seen as an evolution to survive, not as a chore.

Segmentation is so key to marketing success, yet in many ways, it’s been stuck for decades. With modern segmentation, marketers can now realign to their customers in near real time. That means they can understand them better, engage them better, convert them better, and retain those customers better.

Who could argue in the Age of COVID-19 that your customer composition hasn’t changed? Email me if you are using 2019 audiences…

Have you refreshed your customer segmentation since the pandemic started? You might have needed to refresh at the beginning and then refreshed again sometime around July when things settled down a bit. You may even need to refresh now as the winter spike hits and still another once it passes.

If not, then why not?

You’re speaking to customers and buying media for groups that may not even be relevant to you anymore. You might be missing some major new segments.

What if your main competitor has pivoted and you haven’t?

Don’t sleep on this while your market rivals are able to nimbly leapfrog you.

Email me at markailsworth@simmachines.com if you’re stuck with last year’s audience segments. simMachines’ subscribers can refresh their segments with zero additional expense to you.

Don’t let your current segmentation solution’s lack of refresh agility keep your marketing program stuck in the past.

AI Enabled Customer Segmentation Will Transform Marketing