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Nexxus Blog

Take Customer Segmentation to the Next Level: Ready…Segment…Action!

10.9.2015

Each year, life sciences companies spend millions of dollars on customer segmentation studies to group their target customers into broad categories. Yet they often fail to take the next step of converting these segmentation models into action within their marketing campaigns. That is, many companies do not use the segmentation models in day-to-day marketing execution, and even fewer leverage detailed customer-level data to further subdivide broad segments and enable highly-targeted campaigns.

Truly personalized marketing campaigns, in which customers are treated differently based on what the company knows about them - not only their segment, but also tens or even hundreds of other data parameters - can improve response rates dramatically. And in an era of fierce competition, this precise level of marketing can spell the difference between success and failure.

The good news is that today’s advanced technology can turn what was once a complex exercise into one that’s both fast and cost-effective to execute. Take a pharmaceutical company selling an attention-deficit hyperactivity disorder (ADHD) drug, for example. Using traditional segmentation methods, most pharma marketers will divide their target customers into a few major buckets—say, based on level of symptom and attitudes toward medication—and then tailor messages to each specific audience.

While this is an important start, marketers can obtain far more success by further subdividing these buckets. For instance, some consumers with mild ADHD symptoms are currently taking medication, whereas others are not. Some have concerns about side effects, whereas others do not. And some prefer email communication, whereas others prefer phone calls or texts.

With today’s automated technology, healthcare and life sciences companies can fine-tune their big bucket customer segments by further differentiating according to self-reported attitudes, practices, history with similar products, income, education, ZIP code and numerous other variables. They can categorize these variables by business importance, storing all of the data in a single location. And they can quickly combine different parameters to identify specific customers with detailed characteristics, and then craft highly-personalized conversations that resonate with each individual.

For example, pharma marketers can identify all male consumers in their database who have mild ADHD symptoms, are between the ages of 25 and 35, are not currently taking medication, live in Iowa, prefer email communication, and have indicated via a survey that they’re open to taking medication. With this information in hand, they can then create a highly-targeted marketing campaign with specific messages delivered via specific channels to this particular subgroup.

Not only is this type of highly-personalized marketing attainable, but it gets results. For instance, one of our health insurer clients wanted to promote healthy behaviors by encouraging its 2 million members to participate in its health and wellness program. Initially, the company had a ‘one size fits all’ approach to its communications, sending all of its members the same message using a single channel (direct mail). When the insurer revamped its program by developing a sophisticated model for segmenting and targeting its customers, the improvement was significant. They implemented a multichannel approach using email, direct mail, call center and the web. They also segmented messages to members based on parameters such as communication preferences, gender, age and propensity for certain conditions and diseases. Once the insurer targeted messaging based on these parameters, participation in the health and wellness program increased tenfold from 0.5 percent to 5 percent.

As the marketing guru, Theodore Levitt, once said, “If you’re not thinking segments, you’re not thinking.”1 While many healthcare and life sciences companies do think about marketing segments, it’s time to move beyond traditional customer segmentation and make it real in day-to-day marketing execution. Using today’s advanced technology, marketers can take customer segmentation to a far more sophisticated level, increasing customer response rates, and ultimately, their bottom line.

To learn more about how our life sciences marketing software can help you reach your customers with sophisticated, personalized multichannel campaigns, please visit our Nexxus Marketing web page.

1 The Marketing Imagination, Theodore Levitt, 1983.