Artificial intelligence is a computer-powered take on our human cognitive skills. Just like humans, AI can take data like website browsing behavior and natural language and process the information it receives. It can understand, interpret, and learn from that data.
AI can also make data-based decisions faster than us, and trigger next steps instantly—without human intervention. In fact, IDC forecasts 75% of commercial enterprise apps will use AI by 2021 .
As more companies realize the benefits of integrating AI to their business operations, CMSs like Sitecore have adapted to the new playing field, building AI capabilities into their DXPs to provide companies and brands with actionable insights across the entire digital customer experience at every touchpoint.
Also, according to an Evergage research 88% of marketers believe their customers expect personalized experiences, yet, the same paper states that only 25% of marketers are personalizing their messages down to the individual level.
As we discussed in our article on Sitecore AI, marketers can leverage AI to go beyond simple personalization and deliver hyper-personalized experiences as well as track website visitor behavior and automatically segment audiences.
Sitecore AI can also change website page elements in real-time to personalize experiences, helping visitors and leads find the information they want at the moment they need it.
Deploying an AI-powered personalization engine helps companies stay ahead of the competition by discovering and creating customer segments that they may not have otherwise identified.
But before we talk about that, let’s start with some quick definitions.
What is Customer Segmentation?
Customer segmentation is the process of dividing customers into groups based on common characteristics and interests so companies can target each group differently, creating personalized campaigns for each of the segments.
Quick refresh: A segment is a group of visitors who share similar characteristics and have been determined to benefit from the same experience.
For example, segments can be defined by:
- Product/service categories
- Stage in the journey
- Audience types
In B2B companies, the segments are more oriented toward fields such as title and industry, whereas in B2C companies, segments are geared toward age, gender, and life stage.
For instance, in Sitecore, you can use explicit data to target specific content to specific groups of visitors, providing more relevant, personalized, and contextual experiences in many different channels.
Customer Segmentation vs Lead Scoring
Now that we know about segmentation let’s talk about lead scoring. The truth is that lead scoring can be the same thing as lead segmentation and that both terms are used interchangeably to describe the process of assessing the validity of your leads.
However, if we start splitting hairs, we find that both terms are slightly different.
Lead scoring assesses the buying potential of leads as they move from unqualified to qualified. Once they’ve collected these leads, marketers separate the ones that look promising and rank them on their likelihood to convert. These rankings guide marketing teams through their future efforts, determining how much attention a lead receives.
On the other hand, segmentation might go a little farther. Broadly speaking, segmentation is the process of breaking down contacts into demographics. These demographics are related to both actions taken on the website and actual demographic data like job, location and industry.
How Marketers Segment Their Audience
To provide contextual customer experiences, marketers need to target adequate customer segments, guiding the visitors through their own individual customer journeys.
Savvy marketers can use AI and analytics to learn about their segments and craft experiences tailored for each of them, aligning content to the decision stages.
However, before creating a segment, ask yourself these questions:
- Is this segment relevant for the company?
- Is this segment really different from others we’re already targeting?
- Can we communicate with this customer segment easily?
- Is this segment large enough to be worth targeting?
- Do I have enough content available to engage with this new segment?
Once you’ve asked yourself and your team these questions, take a look at these best practices to make sure your segmentation efforts are well-focused.
3 Audience Segmentation Best Practices:
- Avoid Segmentation Bias
Consider everyone in your segments. Bias happens when your users can only interact with your website in such a way that elicits only a specific set of interactions or responses. This means that all the data you receive will be both incomplete and inaccurate.
So, to avoid segmentation bias, you can create your content in such a way that you receive broad responses. This allows you to get an accurate baseline for your prospects, helping you identify different subgroups that you can engage with different content, increasing the chances of converting visitors.
- Prioritize Your Goals
Your visitors are indeed the lifeblood of your website. But you can’t create segments based only on your audience; you should also involve your goals. Focus on segmenting as a way of increasing your ROI.
Every action you make should increase the chances of conversion, and you need to make sure that the segments your visitors are in represent them entirely just to make sure that the content you’re delivering is really in context with their needs.
- Test, Test, and Test Again
The perfect segmentation exists, but you won’t achieve it unless you test a multitude of different approaches. You need to test each segment to make sure it’s delivering value. Measuring engagement, conversions, and revenue is essential to understand the right approach for your business.
You can only understand this if you analyze data from different sources. Bring in data from campaign performance, website analytics, and social engagement as well as sales and customer support information to validate or edit your segments.
Sitecore AI and Customer Segmentation: Automation is Here
From a company perspective, leveraging AI means that you have to make sure you have a coherent vision of your data landscape so you can break silos and host an uninterrupted flow of information that enables integration and standardization of data.
To effectively leverage AI, marketers need to use tools that connect structured, tagged, and organized data with machine learning algorithms to find opportunities for automation as well as triggering intelligent responses. That means using quality data that’s clean and accurate.
At the same time, you should also track the right data, without unconscious bias or unfair outcomes, which means monitoring customer behavior as well as basic demographics.
AI amplifies the power of Sitecore’s suite of web content management products, enabling marketers to deliver individualized experiences that guide visitors along their journey.
Sitecore personalization engine can analyze a customer to learn more about his or her journey, enabling marketers to optimize the experience and nurture their journey toward conversion.
Sitecore AI enables you to leverage analytics and machine learning for testing and content optimization. With Sitecore AI you can:
- Analyze customer behavior and understand their individual customer journey
- Test and select the most suitable content for every customer
- Deliver unique 1:1 experiences to every customer segment
- Modify page elements to deliver personalized experiences
- Create customer segments based on machine learning
- Identify visitor trends
- Automatically analyze and tag images as they’re uploaded to a digital asset management system (DAM), enabling marketers to categorize and locate images quickly and easily.
Sitecore AI gives marketers a suite of intelligent tools with which they can optimize content creation, solving the issue of delivering personalized experiences at scale.
The tool offers marketers real-time, high-performance data processing and analysis that enables teams to forecast trends and generate smart campaigns with little human help.
Read More: Sitecore AI - Automated Personalization
Oshyn is a Sitecore partner that works with some of the best brands in the world to aid in the creation of exceptional digital experiences.
By utilizing Sitecore’s advanced features, we can help you to unlock your customer data and access valuable insights that drive better results.
Learn more about getting started with Sitecore and Sitecore AI with the help of Oshyn.