Retail, Performance Marketing

Leverage Hyper-Segmentation to Boost ROI

MERGE addresses the crucial role of hyper-segmentation to help brands understand their target audience and deliver personalized experiences

PUBLISHED: 3/15/2024

For retailers, standing out amidst this noise is a daunting task. This necessitates a strategic approach to captivate customer attention and optimize ROI; a strategy built on precise data segmentation. 

While personalization helps craft meaningful interactions with customers, it’s not enough to catch their attention. Customers are hit with countless brand touchpoints everyday – whether that’s email, SMS, or paid media. In order to rise above the noise, brands must focus on hyper-personalization. 

Meaningful, one-on-one experiences that make the customer feel like the touchpoint was made specifically for them is what drives conversions, boosts ROI, and helps brands rise above the competition.

Below, MERGE explores the crucial role of email and SMS marketing in this process, highlighting the importance of data in sculpting an effective and hyper-focused customer journey.


Building a Customer Journey Map Using Email, SMS and Data Integration

In the world of email and SMS marketing, hyper-segmentation is all about refining subscriber data into targeted sectors. These targeted sectors are divided into the following groups:

  • Demographic segmentation: includes characteristics such as age, gender, occupation, and location.
  • Geographic segmentation: includes characteristics such as zip code, city, country, and population density.
  • Behavioral segmentation: includes characteristics such as purchasing habits, brand interactions, and customer loyalty.
  • Psychographic segmentation: includes characteristics such as habits, beliefs, personality characteristics, and even social class.


When combined, these data points form a persona or journey that begin to provide a comprehensive understanding of the unique customer experience journey. Not only this, but it begins to help brands understand who their customer is and what motivates them to buy.

Below, we’ll explore how organizations can begin their hyper-segmentation journey.


How to Leverage Hyper-Segmentation in Your Customer Journey

#1 – Understand your brand

The first step is for marketers to orchestrate a comprehensive discovery process to unlock learnings on the unique customer, alongside business objectives and goals. 

Next, marketers need to uncover the story of the customer and their motivations to buy – this can be done by analyzing behaviors to unlock opportunity areas. Go beyond what is face value and penetrate the emotional aspect by bringing psychographic or lifestyle data into the picture to enrich the customer narrative. 

#2 – Analyze the data and identify patterns

In order to see the broader picture, data connectivity is vital. A well-planned data model coupled with a detailed tagging strategy can prevent the siloing of data and can ensure insights that are both actionable and easy to understand.

Hone in on the customer’s shopping patterns to decide what specific touchpoint would help move them along. For example, does the customer only make purchases during holiday sales? Different touch points should be distinguished based on this sort of behavior – those who signed up but never purchased versus repeat customers, for instance. 

Leveraging data visualization tools to surface shopping patterns can also help in this regard. Regularly revisiting and updating strategies while committing to a data-driven approach is similarly key. 

Staying in contact is key, but don't bombard the customer at the risk of alienating them. How many times can you message the customer without annoying them? What about timing – when are they most likely to react to a touchpoint? Your brand must be able to answer these questions.

If you notice a buyer still isn’t making a purchase – consider what will motivate them – is it a price drop? Or maybe new products that just dropped? 

Brands must combine behavioral, demographic, and psychographic data to create a full, comprehensive picture. This will allow them to associate the customer’s behavior with an action – if they are only shopping during sales, then hold back on daily emails, as this will frustrate the customer and could prompt them to unsubscribe. 

#3 – Build a roadmap

Creating a strategic roadmap is an essential step in the process of hyper-segmentation. It's a systematic approach that begins with simple, obvious segments and gradually advances to more complex micro or hyper-targeted segments (“crawl, walk, run”).  Activating the roadmap will be dependent on the skill set within your team, and aligning segmentation endeavors with creative assets and overarching business goals.

Developing a roadmap also emphasizes the importance of understanding customer engagement patterns (e.g. monitoring time between touchpoints, asking questions to develop a more accurate customer profile, etc.), collaborating across channels for a holistic view, personalizing content, and considering geographical aspects for targeted strategies.

#4 – Continuously optimize

Continual optimization is an integral part of the segmentation process. It's not a one-and-done task, but rather a cycle of regular revisits (quarterly or bi-annual) to update and refine your strategies. 

This could mean conducting A/B testing to adjust the frequency of emails/SMS, tweaking their content, or fine-tuning your segmentation parameters as your customer base evolves. The goal is to ensure that your strategies remain effective and relevant, and that they continue to drive success for your business in a landscape where change is the only constant.


Unleash the Power of Hyper-Segmentation in Your Customer Journey

At the end of the day, brands must focus on one-on-one touch points with customers – putting them in groups is not enough. In order to boost ROI and drive conversions, brands must deliver curated, one-on-one customer experiences that encourage brand loyalty. 

Understanding your customer is at the core of hyper-segmentation - merging demographic, geographic, behavioral, and psychographic data sets builds customer narratives and helps brands understand what motivates their customer to buy. Tying these data sets together will inform segmentation and personas development, which ultimately helps brands find their next best customer.

By adopting a comprehensive approach to segmentation, brands and retailers can optimize their email and SMS marketing strategies and fully unlock the potential of their customer journeys.

Looking for a partner on all things data-related? Connect with the experts at MERGE. Our team will work with you on crafting a customer journey that not only resonates with your audience, but most importantly, drives ROI.