Think about the groups of people in your life – family, friends, schoolmates, colleagues, partners, etc. This is actually a daily-based version of customer segmentation.

The fact is that you never communicate with each of these groups the same way. The same goes for a company’s customers. Within your customer base, there are various groups of people, dividing by age, gender, income, marital status, occupation, etc. Due to the difference in demographic, behaviour, psychology, and geographic, each group could have been communicated efficiently in different ways. 

The key to establish a sustainable long-term relationship with your customers is understanding each group of customers well and provide things they value at most. Therefore, customer segmentation plays a significant role in today’s brand – customer relationship. 

What is customer segmentation?

Customer segmentation is the practice of dividing a company’s customers into groups that reflect similarity among customers in each group. The goal of segmenting customers is to help the company get actionable insights on how to reach specific customer group effectively and appropriately, and to increase sales in a scientific approach.

Some scenarios that customer segmentation might be a good choice：

1. Learning about your customers on a deeper level so you can tailor your content to their unique needs and challenges
2. Researching on customers by group to develop a new product or iterate existing product that can better satisfy them
3. Creating targeted campaigns and ads to resonate with and convert segments of customers
4. Identifying new opportunities for upselling and reducing purchase cycle 
5. Understanding who your most valuable customers are and how to convert more customers into this group
6. Communicating with segments of customers via preferred channel or platform with cost-effective advertising ways
7. Improving customer service by providing specific value for each segment that can exceed their expectations
8. Reducing under-performing acquisition campaign that can only bring low-loyalty customers to your storefront

What ATA Technology can do to benefit your company?

Different from most marketing agencies do, we have a strong basis in tourism industry. We know that how difficult it is to transform a regular customer to a loyal one and how a loyal customer can bring to your brand in ways such as word of mouth, continuously using your service, providing feedback for you to improve, etc. That’s the reason why we care about customer relationship management.

In customer relationship management, we utilize Recency, Frequency, Monetary (RFM) model to quantify and segment customer cohorts. Each customer is ranked in this model. The higher the customer ranking, the more likely it is that they will do business again more frequently and with more sales volume. 

An RV rental company in Toronto has increased their returning customer percentage by 40% percent after running targeted campaigns with ATA Technology.

How can ATA Technology help to elevate your company‘s value?

By 2020, a Toronto-based travel agency has served more than 12,000 customers cumulatively. However, the company only used email marketing as their only marketing strategy to promote their products and packages. In the newsletters they sent out, the content was unable to highlight their advantages such as outstanding services and great customer service experiences. Although the email marketing was conducted on a monthly basis, only few returning customers were successfully brought back. 

During the pandemic, travelling outside has become a more conservative choice that most people will be hesitated to travel due to safety consideration. Customer acquisition has also become more difficult and pricy. To address these challenges, this travel agency started to hire ATA Technology. 

To optimize the company’s email marketing, ATA Technology firstly uploaded the historical order data onto the cloud. Based on the customer behaviour, ATA segmented 2 primary customer cohorts. Group A is determined as higher order value, long-distance trip and low purchase frequency; group B is determined as less order value, short-distance trip, high purchase frequency and multi-person trip. 

In terms of these two customer cohorts, the analysis showed that group A customers are more likely to be unmarried couples, childless married couples, and schoolmates aged between 20 and 35, identified as occasional travellers; while group B customers are likely to be big families, family friends, etc., aged between 30 and 45, identified as regular travellers. 

On the basis of the customer analysis we generated, we conducted the optimization of email marketing content. For group A, we tried to utilize more youthful copywriting and visual style combing with youth-preferred popular events or topics. We intentionally promoted campaigns on holidays which younger group has more free time such as Christmas and Thanksgiving. Whereas we tried to promote some discount packages for Group B during the off-season, and introduced some light itineraries. Marketing focus for Group B is on recreational countryside camping activities that are more attractive for the elder and the kids. 

During four-month period of our service for the travel agency, the repurchase rate has been increased continuously, and would be expected to improve 45.5% in a year. Meanwhile, we also created the CRM dashboard to allow the executives to understand customers behaviour through visualized data. In this way, we can easily align with the client’s goal on new marketing plans and seek for business opportunities.