You can have the best product or service in the world but no matter how good it is you need to find the right target market for it. This where marketing segmentation becomes essential. This marketing strategy allows you to identify the various types of customers you want and have. This helps you reach them with the right product and the right message.
How does market segmentation help you find your target market?
Market segmentation by definition is the process of dividing a broad population or target market into subgroups of consumers according to certain shared factors. These can be based on demographics, psychographics, and geographic location. A single individual could fall into various different segments. In a way, we all share some common needs or interests with everyone. We might share common interests with some people, we might live in the same area, or we may be the same age. Each of those subgroups could be a market segment for your brand or company. Through segmentation, you can define your market which will help you understand their needs and wants. This allows you to focus your campaign on your target market which will yield better results than a broad campaign.
Keep in mind that each industry is different so segmentation strategies can vary for different businesses.
What segmentation strategy should you use?
You should use all of the categories in your research however, some might be more beneficial than others if you’re short on time and budget. Before we figure out what strategy you should use we should first look into the various categories you have available to you.
1. Demographic Segmentation
Some of the most critical data on existing and potential customers are their basic demographics. This covers things like, how old are they, what is their annual income, how high is their education, etc. Demographic segmentation is often a useful way to divide up your target market, and generally a good first step in any marketing initiative.
2. Geographic Segmentation
Where people live can drastically change how they respond to interactions with your company. If you can learn where your customers live and tailor your marketing efforts to account for their local values. This information can be useful if you’re looking into marketing internationally or if you have a local brick and mortar business.
3. Psychographic Segmentation
Some of the most subtle yet powerful marketing insights can result from this research. This research is focused on grouping your customers based on their lifestyle, attitudes, values, habits, and opinions. If you don’t know where to start with your research you can gain valuable insights through surveys and looking through your Google Analytics. You shouldn’t skip this segmentation because it helps decode the emotional elements of buying that might otherwise seem impossible to obtain.
4. Behavioral Segmentation
This type of segmentation reveals how customers interact with your particular product or service. For example how often do they buy, where do they buy, what’s their price range, etc. This allows you to position your marketing differently for those who use your product as a daily necessity versus those who see it as a luxury and use it only occasionally.
How do you apply your segmentation research?
Before you can apply your research you need to be able to interpret it. The best way to interpret the information would be to create what is called a buyer persona. This marketing tool’s purpose is to make a visual representation of your target market by applying the information you’ve gathered and turned into a real-life representation of your target market. You give this can describe this persona with your demographic information. You’ve already gained insight about them through your psychographics analysis. You understand their motivations through your behavioral research. You might think you’re done but you also should gain understanding behind their challenges with your product or service. You should also understand what challenges they face during their day. From this information, you can figure out how your product or service will better their lives. You can also figure out how you’ll reach this market since you’ve figured out what’s stopping them from buying your product or service.
Instructions for using the Market Segmentation Tool and Buyer Persona Template
Use the information described under “what segmentation strategy should you use” to help guide you in filling out the columns. If you feel stuck with understanding what is wanted in each box hover your mouse over the box and it will ask you a question that should guide you with filling in that particular box. You should fill out as much content as you can and even if it doesn’t all fit because you’ll copy and paste this information into the buyer persona. Once you’ve filled out as much of the market segmentation tool you can go down to the buyer persona template and upload an image and fill out the boxes. Once you’ve filled out the boxes you can print the template off and use it as a reference in your marketing efforts.