7 segmentation strategies

7 segmentation strategies

Knowing your audience is a basic element in your marketing strategy and is, in essence, an important stage that helps you divide your potential customers into several market segments or achieve what is called market segmentation thus giving you the opportunity to identify the particularities and needs of the target customers, and to offer them the best solution for their problem.

Conversely, market segmentation helps you define and better understand your target audience. By segmenting potential customers into groups that share similar interests or characteristics, you can identify that group that represents the ideal customer.

Why is market segmentation important?

Knowing your customers better, you can realize and execute marketing strategies more suitable for the market in which you operate. Market segmentation can even help you identify niches and uncovered areas that you can explore. Thus, grouping your audience into different types helps you:

  • To create stronger and more targeted messages

When you know your interlocutor very well, you can customize your messages so that they are clear, correct, and much stronger. Market planning and segmentation bring benefits in developing a strong, authentic relationship with your target audience.

  • To offer a more personalized brand experience

Adapting messages and presenting concrete information helps the consumer to remember an image of the brand and increases the level of familiarity with its values.

  • To collect more relevant and easier to convert leads

Your ads and lead generation PPC campaigns will be much more effective and will reach the most relevant categories of potential consumers.

  • Stand out from your competition by offering the appropriate USPs (unique selling proposition).

Your brand will differentiate itself in the market by focusing on the specific needs and interests of the target audience, giving you a strong advantage over the competition.

  • To obtain the necessary insights for the launch of new products

Through much more detailed knowledge of the public, you can identify new products or services that they would need and do not yet exist on the market. Once identified and developed, these types of products or services can be introduced to your customers much more easily, based on the data already held.

  • To achieve your marketing campaign goals much easier

A marketing strategy built on some correct objectives that reflect the reality and characteristics of the customers can only be improved through a carefully realized segmentation.

As long as your segmentation is accurate, up-to-date, and based on recent information and relevant data, it can do wonders for sales.

An example of market segmentation that is easy to illustrate is that practiced by hotel companies.

A hotel may charge differently for the same types of products or services, depending on different variables.

For example, a customer who reserved a room 6 months in advance can pay 50% less than a customer who needs the same room on the spot.

In these situations, segmentation helps to realize price strategies based on demand elasticity. Guests with a price-elastic demand will be charged higher prices than guests with inelastic demand.

In our case, the demand of the guest who books in advance is more elastic and is influenced by the price, so he needs a reduced rate. On the other hand, a businessman who books a hotel room at the last minute is not as price elastic and will agree to pay a higher rate.

The segmentation itself is usually based on four categories:

  • demographer
  • psychological
  • behavioral
  • geographic

Each of these segments has its own purpose. They can help any business increase brand integrity and achieve higher sales conversion if the strategy includes the appropriate messages.

There are, however, many ways in which a performance marketing agencies can help you with audience segmentation based on the data you have.

This article will guide you through some of the most popular market segmentation strategies, as well as some less common ones, that you can use to strengthen your marketing efforts and see a higher conversion into sales.

7 segmentation strategies you can use to generate better results

1. Segmentation according to the stage of the purchase journey

“Buyer’s Journey” represents the path that he takes in all moments of interaction with your brand, starting even before the purchase of the product or service.

This theoretical model begins with:

  • Awareness – awareness of the brand (the moment when the customer discovers it)
  • Consideration – increasing interest in the brand (when it is attracted and delighted)
  • Action – making the purchase decision
  • Recurrence – evaluation of a possible future purchase

The strategy that involves segmenting the market according to this shopping trip is excellent for generating more sales, cross-selling, or for managing situations in which the customer abandons the products in the basket.

So, if you have a customer who is in the early stages of their journey, they are much more likely to need explanatory videos about products or educational content.

Whereas, if they are further along in their journey, it would be ideal to focus your efforts on reviews or examples for different product lines, so that the customer can compare costs.

2. Segmentation according to involvement

Sometimes it can be difficult to choose the best message to convey to your customers if you are not sure how much they know your brand. Here is a list that will help you order the level of involvement:

  • Social media follows
  • Newsletter subscriptions
  • Open or click rate
  • Number of purchases
  • Interactions with your chatbot

You can assign a value to each of these criteria and thus better define the degree to which consumers interact and get involved in the relationship with your brand.

Understanding these market segmentation criteria can help you interact more with customers who are interested in your products and services and can suggest when to stop actions that could lead to overwhelming a customer.

3. Segmentation according to season

This type of segmentation is a mix of geographic and life stage segmentation.

The season is not just about the weather, although indeed this often plays an important role in our purchasing decisions.

There are studies that have shown that a drop of just one degree in the minimum average temperature can cost the UK economy £2.5 billion.

However, in addition, try to think about market segmentation for marketing according to what will happen around your client, taking into account his age group at a certain time of the year.

This refers, for example, to the period when young people are concerned with graduating from college or looking for retirement plans for older ages. Take care, therefore, to offer messages that are relevant to the decisions in your clients’ lives, at the right time.

4. Segmentation according to the device used

Now is the time to start thinking about how customers get in touch with your messages through the devices they have at their disposal.

The increase in popularity and situations in which we use the Internet of Things (IoT) has fundamentally changed the way we all interact and communicate. Segmenting the market according to the device used allows you to optimize both the messages and the media materials created especially for the screen on which they will be delivered.

This segmentation helps you become more efficient and intelligently dose your advertising and communication efforts.

5. Each segment has a sub-segment

Your company should sub-segment its customers in different ways, using complementary basic variables and interact with the target audience through content that takes into account the different categories in which the final consumer can be found.

The sub-segmentation strategy approach involves dividing the customer database in at least two different ways and developing a relationship with them for all combinations of sub-segments. There are many ways in which a company can choose to sub-segment its customers and it is only effective if the brand thus performs better than through universal targeting.

6. Segmentation based on spending habits

This segmentation strategy is an excellent way to catalog your customers and identify how much they are willing to spend on your product or service. Here you have to take into account the frequency with which they purchase, the value of the purchase, and the time interval in which they are made.

This way of working can not only increase sales from existing customers, but can also help you make better strategic marketing decisions. By identifying how much a customer is willing to spend for what you offer, you can sell similar products within their budget.

Of course, this can help you make easier decisions related to the content you create for your brand.

What type of content and what messages convinced a certain segment of the market to purchase your products or services? The answers to this question will help you create content with better conversion and eliminate content that does not get conversions.

When a type of communication does not generate sales, you must reevaluate its necessity and relevance for the targeted segment.

7. B2B segmentation

There are many market segmentation strategies that focus on the consumer, but the last period has taught us to take into account all the opportunities to obtain an additional income.

B2B strategies can include all levels of market segmentation previously addressed. Also, business clients can be divided according to specific dimensions such as the amount of gross or net income.

Even the nature of the business is an important segment because the messages and approach in the case of a bank can be different from that of a florist.

The main purpose of this article was to offer you segmentation solutions and ideas that you can use in your own marketing campaigns.

Because there is no formula for market segmentation valid for all businesses, many ways have appeared in which you can segment the market apart from the four traditional ones discussed at the beginning of the article: demographic, psychological, behavioral, and geographical.

So, try to adapt as correctly as possible to the realities of your industry when defining your customer groups, but don’t forget to keep the segments large enough.

A considerable segment size helps you obtain enough data to evaluate your results and adapt your future communication strategies.

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