Many successful businesses continue to grow simply because they really understand their markets and their customers. One of the most popular techniques businesses can use to better target their products at the right customers is market segmentation.
Put simply, it’s an identification process that allows businesses to pinpoint the specific demands of particular customer demographics and use those learnings to develop products and services that tick those boxes.
The key segmentation areas tend to be:
- Behaviours (buying behaviours or product user groups)
- Demographic (age, cultures, genders, interests, incomes etc)
- Psychographic (personality traits and trends)
- Professional group
- Geographical
Why is market segmentation important?
As customers’ personalities, needs, and behaviours change over time, it is essential that companies keep up the pace and constantly revise their segments with new data to reflect these behaviours. You will want information about which benefits and features matter to customers, and data on emerging social, economic and technological trends that may alter purchasing and usage patterns.
If a company, business or firm ignores market segmentation and ignores their target customer, there is nothing to sell and nobody to sell to. A good market strategy and thus a good segmentation plan can increase your competitiveness, brand recall, customer retention, communications and expand your market. Target the proper segment and you will walk away with a better company and higher profitability.
Once you have defined your segmentation strategy you can focus on segmenting your customer and prospect data in alignment. This will make your sales funnel and lead nurturing process much more efficient and effective.
Five Types of Customer Segmentation and Examples of Implementation
Using the Marketing Mix to Reach Target Segments
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