A key challenge for companies today is knowing who to target, and how: otherwise known as market segmentation. It's an important process that is integral to successful customer acquisition and retention. If your market segmentation is wrong, you'll be missing some key benefits.
Beware of the auto-pilot
Segmentation relies on dividing customers into smaller, more specific groups, to divide your marketing by channel, tone and message. Unfortunately, this process takes time and resource, which can often be a setback or hurdle for marketers.
This results in segmentation "autopilot", where groups aren't as well-defined or divided as they could be. Marketing efforts based on these segments, then, can be too broad and try to capture an audience that your company was never designed to appeal to.
Give segmentation the time, capital and human resource it needs for success. It may take longer, but nobody has ever regretted getting to know their audience better.
Related content: 3 ways to use your market segmentation strategy to be more competitive
3 biggest benefits of market segmentation
If your market segmentation is falling flat, either through inaction and inappropriate action, you're missing out on these three key benefits:
- Segmentation helps to unearth new opportunities within untapped market segments. This means new revenue opportunities for you, and could amount to significant market growth.
- Segmentation can help develop the different personas of your target audience. Persona development is a tool for developing an idea of your ideal customers so that you can create more relevant and targeted messaging.
- Segmentation allows you to explore where you can connect to “low-hanging” segments of the market whose needs are not currently being met by you or your competitors. This can essentially work as your 'quick wins', where you can establish yourself as a credible provider in a new market.
At Perceptive, a couple of the main areas that we help our clients with is market segmentation by needs-based segmentation as well as persona development.
Needs-based segmentation is the most effective way to build a marketing strategy to assess the needs of your target audience. We start by analysing a series of common-need groups, using statistically valid clusters based on common characteristics and psychographics, and tactically assess these through addressing their common needs.
The result for our clients is to yield intuitive conversations with their target segments, by understanding what language and triggers to use to respond to a particular need.
Related content: 4 common market segmentation mistakes and why businesses fail
Improve your marketing effectiveness with segmentation and persona development. Download our free ebook Understanding your audience to get best practice strategies on how segmentation achieves your business objectives.
