How to Leverage Customer Segmentation in Salesforce for Maximum Impact

• Date: July 2023 •
Estimated reading time: 8 minutes
Head of Community at Twistellar
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Imagine that you're organizing an event for a group of colleagues with different interests. To make it enjoyable for everyone, you could divide your guests into different groups based on their interests, such as music, food, or activities.
Then, you could tailor the event to each group's preferences. You'll see how that will affect the impressions of each visitor, making them memorable.
Segmentation works the same way for your business, with the aim of providing personalized experiences to your customers at the right time and in the right place.

What Is Customer Segmentation and Its Benefits?

Customer segmentation is the process of dividing a market of potential customers into smaller groups or segments based on a variety of factors in user profiles, such as:
  • demographics (age, gender, income)
  • psychographics (personality, values, lifestyle)
  • behavior (purchasing history, frequency of purchases)
  • location, etc.
It's not rare to see companies target the whole customer database with the same message, however, the results can be unsatisfactory.
65% of customers say they will stay loyal if the company offers a more personalized experience.
Incorporating customers into a group can be the most efficient means of communicating with them. Let's go over some benefits of customer segmentation.
Benefits of Customer Segmentation
Benefits of Customer Segmentation

Customer Segmentation Models and Strategy

Customer segmentation strategy is a concept that refers to the marketing plan for each customer segment. Basically, it's your idea of the criteria and goals of customer segmentation.
This may involve creating different messaging, promotional offers, product features, or pricing models for each segment, as well as developing customer service and support programs.
Segmentation can be based on many factors, and the segmentation model defines which of them are going to be decisive in building out your strategy.
Customer Segmentation Models
Customer Segmentation Models
To set up the strategy and identify the right model, you have to understand what types of customer data have the biggest impact on conversions. Answering the following questions can help you in their identification:

1. What is your primary goal for implementing customer segmentation?

Whether it's to boost sales, improve customer loyalty, or launch a new product, having a clear objective in mind is the first step in refining your segmentation strategy.
For example, with the goal of increasing the average check for a purchase, you will need to segment customers by solvency and offer a more expensive product. To bring new services to the market, it will be enough to create a database and conduct a behavior segmentation for the pricing policy regulation.

2. What is the largest segment that can help you achieve your goal?

If you're looking to sell a specific product/service, consider who is most likely to purchase it.
The smallest segments won't bring the biggest profit, unless the margin and frequency of their purchases is higher. For instance, it makes no sense to spend a marketing budget on attracting teenagers if their parents pay for their purchases in 80% of cases.

3. What are the characteristics of this broad segment?

To further refine your segmentation, it's important to understand the general characteristics of your target audience.
Quite often businesses start with segments that are too large to personalize the messages. Creating a portrait of your customer will help you to come up with smaller segments and refer your offer to the clients' needs.
F.i., a young urban student woman will hardly buy a family minivan, though either she or the large family are part of the bigger segment of people who are looking for a new car.

4. What segmentation model aligns best with your goal?

Based on the characteristics of your target audience, consider which segmentation model will be most effective in achieving your goal.
For instance, if you're looking to sell hiking boots, a psychographic segmentation model that targets experienced hikers may be more effective than a geographic model that targets all outdoor enthusiasts.

5. Do you have the right tools to evaluate your segmentation strategy?

The success of your strategy has to be based on data. Ensure you have everything to track corresponding KPIs and ROI, and make adjustments as needed.
What's important to remember is that you can't do customer segmentation with — or identify patterns in — data that you don't collect. And the CRM system is a great help for this.

How to Do Customer Segmentation in Salesforce

Segmentation in Salesforce can be approached in various ways and through different systems. The results of this process are well-structured segments that can be easily used as entry points for email, SMM and combined marketing campaigns.
Let's see how marketing teams can make use of Salesforce Reports, Marketing Cloud, Data Cloud for Marketing, or Salesforce native 3rd party apps to achieve efficient customer segmentation.

Salesforce Data Cloud for Marketing (Customer Data Cloud)

Salesforce Data Cloud for Marketing is a platform that allows businesses to collect, unify, and activate customer data from various sources like a centralized repository. It allows non-technical users to easily query data (with consent and preference management) and build complex audience segments.
Note! As of February 14, 2023, Customer Data Platform is now called Salesforce Data Cloud for Marketing.
Salesforce Data Cloud for Marketing Data Model
Salesforce Data Cloud for Marketing Data Model
The synergy of segmentation and activation features is what makes Data Cloud a game-changer on the market. 'Activation' means that with any segment, marketers can kick-start campaigns across multiple channels or run Einstein optimization tools that recommend engagement tactics. So, how does it work?
  • Data Cloud uses flexible matching rules and AI to enrich profiles and collect customer data that can be filtered to create segments
  • After that, you need to publish a segment, identifying an activation target, which is the location where you intend to use the segment
  • The segment builder suggests values that surface new attributes and allows users to enhance, replicate, and share previous segments to speed up their work. These segments can then be injected into Journey Builder

Salesforce Reports

Salesforce (CRM) Reports can be used as an alternative, since they allow creating a basic segmentation by the existing parameters right in Sales Cloud. What you have to consider:
  • It's possible to join up to 4 objects through drag-and-drop by creating up to 3 data relationships. This feature is not available in Salesforce Marketing Cloud when working with data extensions.
  • Picklists can be used to select filter values, which can save time.
  • Using Salesforce Reports does not require a user to know SQL or do any kind of technical preparation besides configuring data sync between SFMC and Salesforce CRM.
  • Another thing is that unlike, SFMC, relationship types are limited to "with" and "without" – in Marketing Cloud this would be an INNER JOIN or a sort of exclusion.
If the standard functionality is not enough for your goals, you can use third-party apps for further enhancements. Campaign Audience Builder (CAB) is a native and easy-to-use tool, allowing you to create even the most complex audiences within a minute using point-and-click.
CAB doesn't require accommodating complex data relationships (like CDP, for example). While not unlimited in its power, there's no data scenario that you cannot segment with this tool. What else is special?
  • The bi-directional data synchronization with Sales Cloud
  • Cross-Object Filter for building up your filter hierarchies
  • With / Without related records
  • All / Any related records
  • Aggregated Filter for evaluating filter criteria based on multiple records
  • Audience scheduling for updating the data
  • Campaign cleansing for removing members that don't fit the criteria

Segmentation in Marketing Cloud

Salesforce Marketing Cloud offers powerful segmentation techniques that allow businesses to analyze customer data in granular detail. However, the process of capturing high-quality data, applying filter criteria, and validating results can be time-consuming.
Many businesses may find that they are losing valuable hours each day by manually conducting segmentation in Marketing Cloud.
In Marketing Cloud, businesses can use one of the available techniques to create customer segments:
  • Custom SQL Queries. This is the most complex, but the most agile way to segment the data using Automation Studio in SFMC. The queries provide the best type of data, including the 'join' clause.
  • Data Filters. It's a less technical way to segment your customer base with the help of visual UI, but filter criteria are limited to the columns in the data extension. That means you will need to use SQL queries for advanced joining with >1 data extension.
  • Contact Builder. Its principle of segmentation is similar to data filters, but it's more complex as it filters across data extensions and appends data to audiences. Demographic and behavioral information is categorized into 'attribute groups', 'events', and 'populations' for segmentation purposes, but you need to refresh these audiences as they're static.
  • Third-party Applications. Salesforce native AppExchange solutions that adapt to your business needs, plus include data from multiple data extensions or data views.
One of the most common apps on the market is DESelect. It doesn't require SQL knowledge and has a drag-and-drop UI. It's fully integrated inside Marketing Cloud, allowing you to leverage all your SFMC data, like data extensions and data views. The functionality includes:
  • Multi-object segmentation, including standard and custom objects
  • Results personalization by setting manual or rule-based values
  • Ability to use subqueries for aggregating data and perform calculations
  • Sorting, limiting and previewing the results
  • Deduplication of records with one or many rules, given a certain priority
  • Filter preview for filters and segments before they are applied
  • Segment sharing for enabling collaboration between the teams
If you are interested in learning more about how to optimize your segmentation strategy with Salesforce or need help implementing third-party tools, don't hesitate to reach out for a consultation.
Our team of experts can provide guidance and support to ensure that you are making the most of your customer data and creating effective marketing campaigns.
Twistellar's team has carried out a number of industry-oriented projects and we are always open to discuss yours!
Chief Executive Officer at Twistellar Europe

Our deep understanding of Salesforce platform ensures successful handling of projects in any domain
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