You can’t be everything to everyone.
We all know this to be true: in our careers, our relationships, our communities, and of course, in our marketing. Trying to market to everyone is another way of saying your product appeals to ‘no one in particular’. That’s why market segmentation is so important. Market segmentation – a fancy way of saying “knowing your audience” – is crucial to your business’s success.
The term “market segmentation” means grouping consumers based on commonalities and shared characteristics. Most people think about groups according to age, income level, and occupation, but segmentation can go much farther than that.
The goal of market segmentation is to define your target audience in a highly specific way. By finding out what makes consumers tick, your company can beat out competitors and better meet the needs of your customers – if you have the right strategy.
When you get the right product, service, or content to the right people, at the right time – the sky’s the limit for you.
To be successful, you need to go beyond the basics. Demographics can only take you so far. Yes, they serve their purpose, but in order to truly stand out in your industry, you’ll need to dive deeper. A customized market research plan can help you define exactly what data you need and how to get it.
Let’s look at four common types of market segmentation to consider when planning your research strategy.
As mentioned before, these are things like age, income level, and occupation. Other categories can include gender, marital status, nationality, and level of education, to name a few.
Collecting and analyzing demographic information is often the first step to identifying a brand’s target audience. Demographics are relatively easy to gather, and they are based on facts. This type of information can be overused, though. When you rely solely on objective facts about your customers, you can neglect the more nuanced personality and behavioral characteristics that drive people to make choices. There’s also a risk of overgeneralizing or making false assumptions.
Geographic segmentation is basically what it sounds like – grouping consumers based on their location. You can dive deeper than that, though. Try breaking your audience down by country, region, state, city, and neighborhood. Other factors like the climate and environment, as well as the area’s culture, can affect your marketing. Culture includes a community’s social norms, religion, shared values, and language. A misstep in any one of these areas can be disastrous for your campaign.
Behavioral segmentation groups consumers based on the way they react to certain circumstances. It also includes their journey along the decision-making and buying process. This could include the way customers travel through a store, the amount of time they spend on a website, or the length of time items sit in their online shopping cart.
Tracking and analyzing consumer behavior helps you recognize specific pain points and key decision-making moments in the buying process. When you meet your customer at the exact right point in the process, you build loyalty and boost sales.
Whereas demographics are objective and relatively easy to gather, psychographics are more subjective and can be a challenge to pinpoint. Psychographic segmentation is based on the intrinsic traits of your target audience. It includes things like values, attitudes, opinions, lifestyles, motivators, stressors, and interests. Gathering this data isn’t as straightforward as collecting demographics, but it can give you deeper insight into your target audience. Well-designed focus groups, consumer panels, surveys, and other research methodologies can help you dive into psychographic data.
Each type of market segmentation has its place in your market research. An over-reliance on a single type paints an incomplete picture of your target audience, resulting in missed opportunities and slower growth.
Data without analysis doesn’t do much good, though, so it’s important to have a clear strategy for implementing what you find out. Once your audience is segmented into specific, targeted groups, you’ll need to develop and test your strategy.
For help defining your strategy and zeroing in on the right market segment for your business, schedule a free consultation today.