The History of Lead Segmentation – from Traditional to Inbound Marketing

Angeline Rast
28 January 2019

Do you remember some of the lead generation strategies that prevailed back in the day? Remember the TV ads, 10-minute product promotions on radios, direct mails, newspapers, magazines, bill boards and event sponsorships among others? Well, with the changing digital and economic times, businesses became keener on statistics and numbers.

As you would well know, numbers do not lie. Consequently, marketers soon discovered that:

  • 44% of all direct mails are never opened. In fact, 91% of email users have unsubscribed from a company email that they previously opted into.
  • 85% of people get irritated with commercials and choose to fast forward. TVs don’t even get that many viewers anymore.
  • 84% of people aged between 25-35 years are more likely to close a website with heavy advertisements.

It became clear that consumers were paying the least possible attention towards traditional marketing messages that sought to forcefully buy their attention as opposed to earning their attention. With the advent of the information age, marketers needed to change tactics to match the informed customer- inbound marketing was and is the answer.

Outbound Marketing

Inbound Marketing

  • It consists of every type of paid advertising/promotion/marketing campaign that is pushed through several channels with the hope of getting the customer's attention whether they like your product or not.
  • Inbound marketing consists of marketing that seeks to attract customers and bring them in by creating for them content that they already are looking for.
  • Major channels of advertising are TV ads, radio, print ads, direct mails, emails, telemarketing, billboards, SPAM and email blasts, etc.
  • Marketers use videos, social media posts, slide presentation, graphics, blog posts, case studies, eBooks and whitepapers. 80% of business decision makers prefer educational content over TV ads, and 89% of B2B purchasers use SEO to research for purchasing decisions.
  • It is characterised by one-way communication.
  • Two-way communication.
  • Interruptive marketing.
  • Permission-based marketing.
  • It is expensive, aggressive, attention seeking, hype and sell driven, and speaks at the audience.
  • It is helpful, educative, specific, relationship-oriented, affordable, speaks to the audience and customers come to the brand.

Lead Segmentation and Inbound Marketing

Even with such great benefits inherent in inbound marketing, it may not avail much if done without lead segmentation. Lead segmentation can be compared to when you need to use a sniper rifle- you have to get into the right posture, rest the sniper rifle on a tripod, relaxed and eye trained down the sight with no pressure you then take the shot. Your guess is as good as mine - you have very high chances of hitting the target.

Lead segmentation is therefore defined as the act of subdividing your database into groups based on a single or multiple criteria. As individuals, your customers have many characteristics that define them. The segmentation process involves the following steps- setting clear goals, gathering data, analysing the data, testing your segmentation strategies, and improving your whole process for optimum results.  Here are some of the ways you can segment your customers:

  • Location – This may be based on what continent, countries, state, city, city size or even what climate. For instance, you are a small local business in Cologne, Germany. You don’t need to market to Berlin or Munich. So your aim should be to create content that is tailored for the locals in Cologne.

  • Age – This segmentation criterion will inform your inbound marketing strategies. For example, as a real estate marketer are you marketing to first-time home buyers, families or retirees?  

  • Gender – Knowing the gender of your audience will really boost your inbound marketing strategies like web design and tone. Companies like Nivea have utilized this approach to better understand how different groups (adult males and females) thought about and used their products.

  • Buyer Journey – Do you create different marketing content for different customers at different levels of the buyer’s journey? A case in point is whereby a first-time visitor in the research stage is going to want to know high-level information about your product compared to a lead who will want to get information on pricing and how to buy.

  • Company Size – This lead segmentation criterion is informed by the fact that- are you creating marketing content for small businesses or large businesses?

  • Brand Loyalty – Would you give the same offer to an existing customer and a new customer? For example, if you own a pharmaceutical industry it would be wise to set up marketing automation to walk your new customer through the basics of your products.

  • Organization type – This mostly applies to B2B marketers, the type of organization can change the needs and wants of the business.

A strong lead segment will have the following characteristics:

  • Focused and significant – Your lead segmentation process should be in a way that is tailored to yield a positive ROI. You should create the largest possible homogeneous group worth pursuing.

  • Relevant – Your segments must be structured in a way such that the knowledge helps your inbound marketing goals. For example, there is no point in segmenting your Steel customers by hair colour since the information will be useless to you.

  • Actionable – You should make sure that your inbound marketing strategies effectively attract and serve the segment.

  • Differentiable – Your segments must be easily distinguished from each other, as well as likely to respond differently to different marketing strategies.

  • Stable – Stability is paramount when it comes to segmentation. If your segment is likely to change in composition or purchase-inclination over time, the effort you put into marketing to that segment is less likely to succeed than if that segment is stable.

Lead segmentation should be based on data since this is the first step towards providing your leads and customers with an improved experience. Data/Information for lead segmentation can be found through social media channels, social media analysis tools, CRM, POS, reviews, and forums among others.  

Wrap up

Today’s enterprises are coming to terms with the fact that the traditional efforts alone are not enough to produce profits. Instead, there is a great potential in inbound marketing when backed by lead segmentation. This is because lead segmentation provides you with economies of scale, enabling you to invest your marketing resources in the best way possible.

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