Your audience wants personalized marketing from your business.
In fact, they expect it. Research has shown that the vast majority (71%) of customers prefer to receive personalized messages from businesses, and are unhappy when they receive generic communications (76%).
The challenge? If you lack an understanding of who it is you’re trying to communicate with, it’s impossible to craft and deliver tailored content to them. You do not comprehend what is important to them, so it is impossible to communicate with them in an effective manner.
If this dilemma sounds familiar, don’t worry. I have an answer for you, and it’s called dividing the customers into groups. Segmenting customers can assist you in getting a better comprehension of your target audience so you are able to maximize the accuracy of your marketing initiatives. Let me show you how it works.
What Is Customer Segmentation?
Segmenting customers involves dividing them into distinctive groups based on shared factors like age, gender, purchasing patterns, and requirements.
Businesses employ customer segmentation strategies to gain more insight into their potential consumers so they can provide them with tailored promotions such as ads, emails, and postings on social media.
Customer segmentation is not just focused on successfully targeting a fresh crowd. This is an excellent opportunity to reach out to former customers and inspire them to make new orders through sending accurately focused communication.
Remember, every customer is unique. Each person has their own particular way of shopping and motives for choosing your business over other competitors. It is not feasible to customize your marketing for every single person, yet a customer segmentation method is the closest alternative.
Why Is Customer Segmentation Important?
One benefit of this is that it can enhance your customer service. Gaining insight into what your customers require and desire puts you in a better position to aid them in dealing with their issues.
Does customer service matter? Absolutely. Research shows that if a person gets a bad experience with a brand, one out of five customers will no longer support that brand. Therefore, it is essential to invest the extra effort in providing great service.
Similarly, segmenting your audience helps build customer loyalty. How? The majority of people (79 percent) become more devoted to companies that provide individualized communication, indicating that personal communication is important to producing customer loyalty.
What do loyal and happy customers have in common? They’re more likely to shop with you. Tailoring the shopping experience to a certain segment of customers encourages dedication to your business, which can help to drive conversions in the long run.
Not convinced? Research findings indicate that more than 60 percent of shoppers are likely to purchase from the same store a second time when the shopping encounter is personalized. The figures present a powerful proof.
Customer Segmentation Models
You could tailor your customer segmentation models to suit your company’s requirements and marketing objectives. This article examines 6 of the most frequently used models.
1. Demographic Segmentation Model
Segmenting the population into groups based on demographic qualities such as age, revenue, marital status, and profession is known as demographic segmentation.
Let’s assume that our group of listeners comprises both males and females who are between 30 and 65 years old. You want to initiate a TikTok campaign in order to raise awareness about a new product.
- 61 percent of TikTok users are women.
- 11 percent of users are over 50.
If you solely promote on TikTok, you are omitting a large segment of your potential customers. Divide people into groups based on demographic information, and you can figure out that 73 percent of individuals between the ages of 50 and 64 use Facebook.
Pros and Cons of Demographic Segmentation
This model is user-friendly and assists you in modifying your vocal intonation to reach distinct ages and genders.
The main downsides? You risk making false assumptions about a particular segment. You might also fail to keep your company’s identity distinct by attempting to reach so many different demographics.
Always use this customer segmentation model alongside other techniques. It might be useful to be aware of a customer’s purchasing behaviors and beliefs, or even where they are based.
2. Geographic Segmentation Model
When using geographic segmentation, your audience can be divided into groups depending on where they conduct activities such as their job, residence, and purchases.
This type of customer segmentation analysis is fairly straightforward. The main disadvantage? Ironically, it’s simplicity. Geographic segmentation does not bring to light a lot concerning your target market alone, but when it is used in combination with other data-collection systems, it can help create a comprehensive profile of your viewers.
3. Psychographic Segmentation
No two of us are exactly alike, yet there are still similarities between us in the form of traits and characteristics. Grouping customers and potential customers according to interests, lifestyles, personality characteristics, cultural notions, and values is known as psychographic segmentation.
Psychographic segmentation gives you insight into the mental makeup of a customer, so you can create campaigns which are personalized and pertinent. The major difficulty is accumulating (and sorting) the appropriate information.
4. Technographic Segmentation
Grouping individuals depending on the technologies, gadgets, and programs they possess is referred to as technographic segmentation. Why does this data matter? Well, according to statistics:
- 79 percent of U.S. smartphone users purchased something online through their mobile phone in the last six months.
- 40 percent of consumers switch to a competitor after one (yes, one) bad mobile phone experience.
- Purchases made on tablets are set to rise to over $64 billion in 2022.
As a marketer, you should be aware of the ways in which people are interacting with your content so that you can maximize their user experience and ensure that your messages are reaching the intended audience. Technographic segmentation can help.
5. Behavioral Segmentation
Do you want to find out how individuals in your target market respond to your company? Try behavioral segmentation.
Creating categories of people based on shared behavior tendencies is known as behavioral segmentation. The information these patterns reflect show how shoppers connect to your company, allowing you to find out the appropriate way to reach them during the process of procurement.
Behavioral segmentation can be integrated into any part of a marketing plan, such as redesigning a landing page or issuing promotional emails.
6. Needs-Based Segmentation
It is usually beneficial for marketing to demonstrate to prospective customers how your products or services satisfy their requirements. That’s where needs-based segmentation comes in.
Customers are sorted according to their necessities which your product is intended to fulfil. The benefits they’re looking for when they buy something. What difficulties are they facing, and what issues do they need to be solved?
The biggest challenge? Identifying what these needs are.
For example, say you’re a food brand. Two prospects follow you on social media. One desires freshly-prepared poultry and the other desires a plant-based diet. You can advertise meat and non-meat products, but the same promotional strategy won’t be effective in reaching both markets.
Going into depths about groups’ wants and incentives will help you obtain the most out of your efforts.
How to Get Started with Customer Segmentation
It may appear to be daunting to begin with, yet you will soon become used to the idea of customer segmentation. Here are four simple steps to assist you in using customer division.
- Create audience categories that make sense for your business. Examine your current customers. The goal is to choose specific categories, but not so specific that they only describe tiny percentages of your customer base. For example, if 50% of your clients are working mothers, that becomes a category. If 25% of your customers are stay-at-home moms who live in rural areas, that can also become a category. However, that 1% of single college males may not be a relevant category. Once you have this information, ask yourself – am I catering to each of these unique groups?
- Set specific goals. Naturally, you want to grow your business, but how do you know when you’ve achieved that goal? Set specific milestones for designated time periods, like: We will have 1000 followers on Instagram by April 1, 2023. Determine how you will use audience segmentation to reach your goals.
- Experiment with various channels. There’s only one way to find out how audience segmentation affects each of your sales channels – try it out! Apply audience segmentation tactics on emails, social media, content marketing, etc. For example, send your group of working mothers an email about preserving more time for their children, and the group of stay-at-home mothers an email about preserving a little time for themselves. Track new engagement levels to find out where audience segmentation is making a difference.
- Be flexible. Once you feel comfortable with audience segmentation, continue to evaluate your results and change your approach when needed. Keep in mind that customer subgroups can change over time.
Tips For Bringing Audience Segmentation Into Your Online Marketing Strategy
Separating customers into distinct groups is an effective tool to help your sales personnel discover new potential prospects. If you are all set to begin, keep these points in the forefront of your mind while you get ready for the beginning.
Customer segmentation should be an ongoing process
It’s not advisable to merely set-and-forget your segments. Your company should be routinely changing which customer segments they focus on. The most effective strategy to accomplish that is to set objectives and then analyze their progress. Do you want to reach more people? Gain more subscribers? Improve your email campaigns’ click-through rates?
Aim for a target and then gauge how successful your divisions are in helping to accomplish it. If you fail to achieve your objectives, it may be necessary to tweak your divisions to attract the target demographic more efficiently.
Don’t be too narrow
It may be easy to only aim for a particular part of your intended demographic, however it is important for your business to not be too restrictive in its decisions. Your marketing strategies should be directed at distinct sub-populations that contain a sizable enough number of people to make your efforts worthwhile in terms of cost and expenditure of time. You might end up spending more money on your online marketing plans than what they bring back in profits.
Use multiple channels
Rather than relying solely on customer segmentation, it’s essential to develop and implement a comprehensive multi-channel marketing strategy. The two should work together to effectively reach the target demographic you are aiming for. A good multi-channel marketing strategy will include outreach that takes place through:
- Social media platforms, like Twitter and LinkedIn
- Blog posts on your website
- Email marketing campaigns
- YouTube or other socialized video platforms
The information you obtain from employing multiple sources will also assist you in further honing how you communicate to your target audiences. An example of this could be that the younger people in your crowd are significantly more responsive to YouTube clips. Your business could utilize that data to devise more individualized promotional material for them.
Use customer journey maps
The most effective way of gaining insight into who your customers are and what they are after is to analyze their web activity. Constructing journey maps for customers is an incredibly successful method of achieving this goal.
A customer journey map is a visual representation of the sequence of events that take place from a customer initially showing interest in your business to becoming a paying customer.
You can generate maps that track the customer experience for each part of your target audience. Employ real consumer data to influence the maps you develop. Next, you can concentrate on finding precise possibilities for increasing marketing and sales within each journey map. Miro provides a great customer journey map template.
Offer different benefits to different segments
Remember that the different groups of people you are targeting will likely have various responses to the advantages that you are highlighting.
Let’s imagine you run a grocery delivery company. A portion of those whom you are targeting might put the most importance on wellbeing. In that situation, it would be important to focus on showcasing the healthy options when you are sending out marketing materials to that demographic.
Maybe moms are part of the crowd you’re trying to reach. GWI’s research has indicated that moms are more willing to make buys when presented with incentives such as complimentary delivery and discounts. You should emphasize the advantages when attempting to reach this sector.
Knowing what each of your groups is most concerned about is essential. To become familiar with the situation, you need to assemble data and see what sorts of things have most commonly made an impression on individuals with varied backgrounds.
Understand the value potential of each segment you create
In order to maximize your efforts while targeting different crowds, it is essential to figure out how profitable each group can be.
This enables you to use your restricted marketing resources in a more effective way. You should never invest more than what you anticipate to gain from a piece of the advertising. It is of utmost importance that you break down your content into many smaller parts instead of just a couple of larger ones.
Let’s keep going with the example of getting groceries delivered from the last part. If your target audience contains mothers, it would be wise to do research to accurately assess the worth of that demographic before dedicating resources to it.
An illustration of this would be the entire yearly market price of this segment being $100,000. It is essential for you to figure out what part of the segment you can aim to attract and then determine the cost of it.
Conclusion: Customer Segmentation
If you’re trying to upgrade your marketing, customer segmentation is your friend. By breaking down your audience into smaller groups, you are able to figure out what is important to your clients, conduct more effective targeted campaigns, and eventually turn more potential consumers into real customers over time.
Begin by assessing the different segmentation models I discussed and contemplate which one is most advantageous for your objectives. If you require direction for choosing which customer segmentation is best for you, look into my consultancy services to find out how my staff can assist you.
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