If you’re an FMCG or CPG company, getting to know the consumers who use your products certainly has its challenges. With a vast array of age groups, educational backgrounds and socio-economic criteria, companies need to find out exactly how people think and and why they act.
In this post, we’ll discuss the uniqueness of the FMCG & CPG market, the importance of consumer data, and how it can assist with consumer segmentation. Plus, you can see a real example of how a global brand captured consumer data using a gamified experience.
The importance of consumer segmentation
In simple terms, consumer segmentation refers to dividing or ‘segmenting’ your customer base into smaller groups that share characteristics, whether it’s their age, gender, spending habits, or more specific interests.
Let’s say you’re a cosmetics brand, with products varying from hair products to deodorant. Your entire customer base might range from girls in their teens to men in their 80s. How do you turn that into a practical, useful target audience? The truth is, you can’t. You need to segment and break down your audience into smaller groups.
Doing so has a number of benefits for FMCG or CPG brands. For one, it helps you identify your most profitable customers. That information can be used to develop products that they want and need, or just concentrate your marketing efforts on these valuable segments.
By creating well defined groups of customers, you’ll also be better placed to engage those customers and build lasting, loyal relationships. The goal for FMCG and CPG brands is to offer customers products consumers want and keep them coming back for more.
How to segment your customers
There are four main categories of customer segmentation, each of which have a number of criteria you can use:
- Socio-demographic segments: Gender, age, education, income, family size
- Behavioral segments: Buying frequency, order value, customer loyalty, order type (online vs in-person)
- Geographic segments: Country, region, community or type of location (e.g. urban vs rural)
- Psychographic segments: Values, activities, interests, opinions, preferences
Segments can be based on one factor alone, such as age – 18-30, 30-50, 50-65, 65+. Alternatively, they can be multi-dimensional to create a detailed customer profile, such as women over 30 with kids and an interest in baking. Needless to say, the more criteria involved, the smaller each segment will become. It’s important to find the right balance for your marketing efforts.
How collecting consumer data helps
Here’s the crucial bit. To segment your audience, you need consumer data to guide the way. In other words, you need to know about the interests, motivations, and values of your customers if you want to split them into groups based on that information.
This data can only be captured directly from consumers. While they might provide it freely to friends and family in casual conversation, it’s another challenge getting them to submit this information to you, as a company.
The key is to create an engaging, two-way experience. This was the objective of HH Global, a specialist marketing execution provider working with a global pet care brand.
They needed to capture the initial attention of consumers, before providing a compelling reason for them to share information about their pets. The end goal being to create highly personalized and engaging communications. The solution was a pet-themed Advent calendar using 3radical’s audience engagement platform.
Guiding segmentation with data
The Advent calendar was introduced in an email invite. This alone saw click-through rates rise three times higher than typical communications. Once users had clicked through, they were given a short survey about their pet. To test its effect on completion rates, the survey was optional for some users and mandatory for others. Interestingly, 63% of consumers in the ‘optional’ group still chose to complete the survey.
After the survey had been completed, they gained access to the Advent calendar game experience – which was instantly personalized using the information they had just submitted. This led to a 5% increase in ‘known pet’ information for their consumer base.
The calendar then encouraged continued engagement over the course of twelve days, with rewards including prize draw entries, discount coupons, and helpful video content. There was also the added surprise of randomly selected consumers winning special prizes, including six months’ worth of free pet food.
The result was 25% of their audience returning to the calendar on at least eight different days. On top of that, 44% of users clicked through to other parts of the client’s website after engaging with the Advent calendar experience.
As with most customer engagement campaigns, there were more potential rewards after the promotion was completed. The campaign allowed thousands of promotional coupons to be distributed to engaged consumers, sowing the seeds for further direct consumers engagement successes in the future.
Your consumer segmentation strategy
With real data, submitted by consumers themselves, you can eliminate assumptions and create a truly customer-centric approach. Your FMCG or CPG brand can build a more detailed, unique profile for your entire target audience or even specific customers. The result is more meaningful communication with those customers to increase engagement, humanize your business, and foster loyalty in the long run.
3radical’s innovative customer engagement platform is here to help you earn data directly from your customers. Using gamification techniques, you can engage consumers to create a lasting connection, meaningful communication and that all-important earned data.