Data Quality: The Make or Break Key to Successful Segmentation

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By now, you know the positive impact good customer segmentation can have on your marketing efforts.

Dividing your audience up based on key firmographic or behavioral differentiators allows you the flexibility to create targeted campaigns capable of speaking directly to a specific group’s pain points, wants, and needs.

In turn, that means better campaign success leading to higher conversion rates and better customer satisfaction. To get there, the best demand generation marketers know that data quality reigns supreme. Without good, quality data driving key segmentation decisions, you and your team risk segmenting customers based on potentially inaccurate insights.

The impact of such insights can negatively impact your company brand and customer experience (not to mention the ROI of your campaign efforts). Many marketers fail to prioritize data quality and as a result, their segmentation efforts (among several other marketing activities) tend to fall short of expectations.

So, to combat those mistakes and help you extract the most value from customer segmentation, the ReachForce SmartForms team has put together this post to demonstrate the role data quality plays in successful customer segmentation.

Why Segment Customers At All?

As explored in previous posts here on the blog, customer segmentation helps your business succeed in a few key ways:

By delivering the right content to the right customer (at the right time).

As mentioned before, customer segmentation is all about creating a best-in-class customer experience unique to that specific audience. For top-of-the-funnel demand generation activities, that often means reaching your target customer with the right content, at the right time, and through the right channel. Doing so maximizes your opportunity for customer clicks, leading to higher conversions, and eventually more revenue.

By helping you recognize good (and bad) product behavior.

Segmentation serves an obvious purpose in lead generation activities. Perhaps less obvious is the role segmentation based on good, quality data plays in maximizing your customer’s lifetime value (CLV).

CLV measures the lifetime projected revenue of a particular customer, including both any potential upsell opportunities and the likelihood that the customer renews their current agreement at the end of the contract. Good demand generation marketers can forecast CLV based on the combination of key firmographic and behavioral data.

For example, assume your data shows that your most successful customers tend to come from the software industry and have less than 50 employees. That is your firmographic data. Among those software companies, a key differentiator between those that renew their contract and those that churn is whether or not they start using one specific feature of your product within the first 15 days of signing on to your solution. There is your behavioral data.

Combined, those two data points reveal an important insight that, if acted upon, has a huge potential for reshaping the way your business onboards new customers and introduces them to your product.

Of course, the validity of that insight hinges completely on your data quality. Assume you extracted the same insight from your existing data, but missed out on this critical insight: 75 percent of the companies that churned your solution were B2C (not B2B) software companies. Really, the use of that one specific feature was a false flag, the true indicator of CLV is the segment they serve.

That extra bit of information may be something your company already knew but had failed to connect the dots on without a single, unified source of enriched data. As a result, you and your team may spend considerable time and money fighting the wrong battle.

Data quality
Customer segmentation opens the door to new business, but also helps you identify customer behavior indicative of growth or potential churn.

By teaching you where and how to scale your business.

One of the biggest benefits of customer segmentation actually comes outside the world of marketing. Companies with good data quality can segment customers in new, creative ways that reveal previously-undiscovered business opportunities.

The example above highlights just such an opportunity. If B2C companies are signing up for your product, there is clearly a demand for your solution. However, if those customers are not renewing the solution, your business may consider launching a version of your solution geared more toward the needs of B2C software companies.

The Role of Data Quality and Segmentation in Account-Based Marketing

As more businesses begin to transition at least part of their marketing strategy toward a more refined, account-based approach, it may seem like the need for segmentation is decreasing.

However, the truth is, account-based marketing strategies rely on good data quality and precise segmentation just as heavily as traditional marketing plans. Here are two ways segmentation impacts account-based marketers:

By showing you which accounts to focus on in the first place.

Often, businesses make anecdotal decisions about which accounts to focus on for account-based marketing. Just because one company gets a lot of value from your product or service, does not necessarily mean other companies operating in the same space will find the same value. Companies working with enriched, unified data, however, can paint a more comprehensive portrait of potential target accounts. Good data quality reveals the commonalities among your top customers and allows you to identify those factors in other organizations. As a result, your account-based marketing strategy has better accuracy and a higher likelihood of success.

By helping you get your message in front of key stakeholders.

Customer segmentation still plays a role after you have identified those companies, too. Within any one organization, there may be several key stakeholders who need to sign-off on any purchasing decisions for your product. Each of those stakeholders may have different pain points and initiatives about which they care. Segmenting your audience even within an individual account gives you the opportunity to create a personal message for each stakeholder at the company. That strategy enables more success in positioning your solution as something that benefits the entire company, not just one stakeholder.


To learn more about how ReachForce SmartForms can help you optimize lead generation and improve your impact on revenue, sign up for a free trial and get a demo today.


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