Last updated on September 14th, 2017 at 10:52 pm
Market segmentation and ad targeting isn’t something new. But if you’re not an advertiser or marketer, then you’ve probably never thought about it in detail before. Consider these examples: Would it make sense to advertise a pharmaceutical product on a children’s channel? Or baby formula at a rock concert? Probably not. You’re more likely to see a billboard for Pepsi at a concert. That’s what you’d prefer to see and where you’ll most likely end up purchasing that product. That’s targeted advertising. Every product on the market has a target audience and choosing the appropriate ad for the appropriate place and time for that audience is what makes for successful advertising. Ever since we began giving up our information to websites such as Facebook, advertising has become uber sophisticated. After all, it’s not just our age, sex and location that is public knowledge anymore, it’s also our hobbies, our favorite movies, our shopping habits and more. This makes for laser sharp ad targeting especially for anyone who knows how to utilize Facebook ads.
Facebook ads are famous for their high ROI compared to other advertising platforms. But companies often don’t strategically target segments when creating Facebook Ads although that’s where the money’s at. You’ll get more out of your advertising budget when you tailor the right ad to your segmented audience rather than using generic copy over a blanket audience of everyone and anyone.
Competition on Facebook
Facebook is massive. It has almost 1.9 billion users and is currently the most promising social advertising platform for large e-commerce businesses. In April 2017, Facebook announced that there were more than 5 million active advertisers. It is getting busy on Facebook’s turf, which means that brands need to get savvy and smart about their advertising.
Segmenting is the easiest way to start and get a higher ROI. It’s important to place the right message in front of the right audience. Do you think a loyal customer who has purchased several times from you would appreciate seeing your ad which says “30% off for our first-time customers”? Probably not. And that’s where segmenting comes in. Segmenting ads on Facebook will help you create better ads than your main competitors probably do. Read on to discover five important segments that many Facebook managers forget to implement!
Segmenting Customer Database for Facebook
In order to create ads that are segmented through the method I will be presenting to you, you will need to have a strong CRM and email marketing system. Almost all brands, even small ones, have either one of these. But if you don’t have a mailing list or a way to capture customer information on your website set up yet, it’s not too late. Head on over to ConvertKit and check out their awesome features. ConvertKit is my favorite email marketing tool out there today. With ConvertKit, you can create attractive forms for your website, track your subscriber growth, organize your subscriber list, for example, by location, and this invaluable feature: Sending out personalized and sequential emails to your list… automatically. Your list is how you’ll communicate with your customers and potential customers and eventually build trust between them and your brand. The result is almost always increased conversion rates for your business. Make list building a priority.
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Now, in order to segment audiences, you will need the following information from your database:
- Purchase Date
- Purchase Value
- Purchase Frequency
- Product Type
- Newsletter subscribers
You’ll use this data to create behavioral customer segments, which will then be used as custom audiences in Facebook Ads.
Segment 1: Potential Customers
This segment is created for newsletter subscribers or leads who haven’t made a purchase yet. Some of you may ask: why would I invest ad money in targeting this group, while I can just send them an email for free? Potential customers can ignore emails by not opening them, and unfortunately this happens more often than not. How many times have you skipped over emails, or several emails without opening them? Facebook ads will make sure that you reach those who delete your email before even opening them.
Create this segment depending on the size of your database list. If your newsletter subscriber list is small, one list is enough. If you have a thick and juicy list, I suggest you create two separate lists:
- New Subscribers: those subscribers that are complete newbies. They may have only been subscribed for 1 or 2 months and you haven’t really had the opportunity to monitor their activity or engagement with your content yet.
- Engaged Subscribers: those subscribers that did not make a purchase through your email campaigns yet, but did engage with your emails somehow, either through opening your email, clicking on a CTA prompt, or other.
Segment 2: One-time Purchasers
These are the customers that already made a one off purchase. Since they already bought something from you, and assuming that they were satisfied with your product and service, your goal is to increase their customer value.
This data is taken from your general customer database within your CRM by filtering those customers that made exactly one purchase, in the last half year. Their memory of your brand at this point is still fresh, which makes it easier to convert them again.
Segment 3: Repeating Customers
This segment is focused on your hard-core fans, those who have bought at least twice from your business. Your objective is to offer them a deal adapted to their situation: “30% off for our biggest fans” or “25% discount for our loyal customers, shop now!” Try offering them products that have a higher value. Again, focus on recent customers – those who have purchased in the past half year.
Segment 4: Inactive Customers
It may be somewhat harder to convert this segment – this segment represents customers that have made a purchase in the past, but recently stopped buying from you. You want to ignite their interest again by creating a campaign specifically aimed at these customers. Filter them in your CRM by selecting those who have made a purchase, but haven’t purchased anything in the past half year.
Segment 5: New Customers
These campaigns are aimed at those who recently made a purchase. Filter transactions that have been done in the past 30 days, who only bought once and are thus new customers. You could create different ad campaigns for this segment such as showing them similar products to the ones they purchased that they might be interested in or offering them a deal which you can easily set up through email sequences in ConvertKit for second-time buyers.
By analyzing your customers’ past behavior with your brand, you’ve already begun the process of successful advertising. The action you should be aiming for is market segmentation that will help you deliver unique content that resonates better with each group you want to target.
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