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Ask any marketer about their priorities for the year and, chances are, personalization is high up on their list. After all, 98% of marketers say personalization advances customer relationships. And 86% of customers say personalization plays a key role in purchase decisions.
For many marketers, the first step toward personalization is segmentation. And while segmentation on its own won’t get you to the kind of personalization the drives 35% of Amazon’s sales, it is part of that puzzle—and not a bad place to start.
So, what is geographic segmentation? How do we do it? And does it move us toward personalization?
Here are some answers.
Geographic segmentation is when marketers group customers or prospects based on their geography. The goal is to target marketing at a specific location and/or avoid marketing to people in a specific location.
For example, a brand marketing events in Northern California may want to target customers who live within a 100-mile radius of that event. Or a brand that only ships within the US may want to exclude people outside the US from their ad campaigns.
Another good example of geographic segmentation is for retailers selling seasonal products. Segmenting based on geography can help you marketing swimwear to customers browsing in Mexico in December and winter coats for customers in Canada that same month.
Physical store locations: Obviously having a physical store limits where you want to advertise.
Physical event locations: Same thing with physical events.
Climate/seasonality: South Africa’s summer is the US’s winter—and vice versa. Which means it doesn’t make a lot of sense to advertise “winter” or “summer” sales across both hemispheres. Even if you’re having a sale in both places, changing the language lets customers know you’re talking to them—not just their northern or southern neighbors.
Culture: McDonalds in Germany serves beer. In India, no burgers. Product lines, sales choices, jokes…they all rely on culture in order to work. Make a ribald joke in Germany and it’ll probably go over really well. Use that same joke in the Bible belt and your sales are done for.
Rural vs. urban: People who live in urban centers have different needs and perspectives than those who live in tiny towns or stretches of farmland. Tractor parts are probably going to go over better with the latter audience. Folding bicycles will probably go over better with the former.
For physical stores or location-specific products and services, geographic segmentation is a god-send. After all, who wants to spend precious marketing dollars advertising their San Diego dental office to people in Detroit or Cabo? Clearly, nobody.
On a deeper level, geographic segmentation can mean speaking to people in their own language. Advertising products popular in a certain region. And skipping messaging that won’t resonate with a certain group.
For example, in Northern Europe, cardamom buns are incredibly popular. In the US, cinnamon buns would probably sell a lot better than their cardamom counterpart. And so an international recipe site might want to highlight their cinnamon bun recipe in the US and their cardamom bun version in Northern Europe to maximize click-throughs.
Similarly, an international restaurant chain might have different menus in different places. An ad campaign might look different in the northern US vs. the south. A great joke in one place might be inappropriate or confusing in another.
Of course, as with any type of segmentation, geography isn’t always a perfect way to understand who you’re talking to.
Someone browsing your site while on vacation in Mexico might still need US shipping info. A long-time customer who always ships to their home in Maine may feel misunderstood when you start advertising events in Portland because they logged in on a layover. A subscriber who travels often for business is going to get irritated if your app keeps switching languages on them every time they speak at a conference abroad.
Which is why geographic segmentation is a good thing, but if your goal is to personalize for individual customers, it can be a too-broad strategy.
Geographic segmentation is a start. But based on our research, it’s nowhere near enough to keep you competitive in this marketplace.
In fact, behavior is the most predictive type of data when it comes to customer outcomes. So folding that data into your segments is a smart step forward.
In our experience, though, even that won’t keep up with industry leaders like Netflix and Spotify. Because they aren’t personalizing their content and offers with segmentation alone. They’re personalizing on a 1:1 level.
My Netflix recommendations look different than yours. Yours look different than your best friend’s. Your best friend’s look different than their significant other’s. Because Netflix isn’t segmenting us into “thriller lovers” or “people who watch romantic comedies.” It’s going so much deeper. It’s treating us each as a segment of one.
Which is why one thriller-lover might have a recommendation stream full of Tommy Lee Jones and Harrison Ford, with a sprinkling of Gillian Flynn projects. Another might be full of female-led revenge stories like Widows or Kill Bill. Still another might be a mix of thrillers and documentaries.
The point is that segmentation helps you narrow in on the right audience. But it’s imperfect. The more you can move toward segments of one, the closer you get to really meeting customer needs and understanding them not only today—but as they change over time.
So, segments of one sound pretty darn good. But how do we get to that level?
The answer starts with a CDP with built-in intelligence—data science, machine learning—and the ability to automate that intelligence so that your team of 10 isn’t trying to personalize for a million customers.
For the nitty gritty details on how this all works, get in touch. We’d love to show you our CDP and talk about how it enables that granular level of personalization.