When it comes to your target customers, do you think one-size-fits-all?
If so, you may be missing out on endless brand opportunities. The most strategic leaders think beyond general insights, and rather, target their marketing to specific (and strategic) customer segments.
By embracing segmentation, you will cultivate opportunities to connect with prospects, and ultimately drive growth. Today, let’s discuss what segmentation is, and how it can elevate your business’s presence in the marketplace.
Defining Strategic Market Segmentation
As a business, chances are you have a variety of “flavors” when it comes to what you offer, and who you serve within your particular market. Market segmentation is a strategic process that companies use to divide their total market into smaller, more manageable parts, allowing them to better understand and serve the needs of their target audience.
In order to effectively target a specific group, it's important to first identify what characteristics distinguish them from other customer segments.
One way to segment your audience is by demographic factors, such as where they live. For instance, maybe you work with clients across a broad geographic landscape. Based on what you learn about your customers over time, strategic segmentation could look like marketing different product or service offerings more heavily in certain locations than others, using data-driven research as a guide.
Segmentation can also mean creating different subsets of your overarching customer-base by various psychographic factors, or psychological attributes.
Why Segmentation Matters
Regardless of how you segment your target audience, it’s important that you do. The market is a chaotic place, and segmentation helps you know your customers on a deeper level, offering key insights to help you determine where you should focus your attention and resources.
Sure, you have various customers across the board, but do you understand where most of your revenue (and impact) is being generated?
If you don’t know the answer to this question, lost opportunities to drive your brand forward are inevitable. It’s like accelerating your car down a longer road than needed to get to your destination; you may be expending energy in hopes of getting somewhere, but the path is much more costly and strenuous than necessary.
By segmenting your audience, you look at both demographic and psychographic factors to determine which groups are most valuable to your business, so you can take a deeper dive into those market segments, allocating your resources accordingly to make the most impact.
Don’t decide how to segment your audience alone; use your data to drive you. Maybe you think your audience is best segmented by age, when really it is geography that drives their purchasing behaviors. Maybe you think socioeconomic status is the driver, when really grouping your prospects by psychographic factors makes more sense.
The key to understanding how to segment your audience is to look at your data through different lenses, and identify where notable trends truly exist. Rather than making assumptions about which customers will respond to certain marketing efforts or brand offerings compared with other segments of your audience, taking an objective, data-driven approach is critical to your strategy moving forward
All in all, knowing your customers is about much more than a single set of “profiling” information. Your prospects are humans, with a wide variety of characteristics and qualities that inform how they engage with your brand. The more you learn about your customers – and the segments that comprise your target audience as a whole – the better off your company will be.
Looking for more guidance when it comes to strategic segmentation? Reach out today to chat with our research-focused marketing and branding team!