Today's consumers value personalization, perhaps more than any generation that has come before them. The businesses that are able to personalize the buyer's journey and customer experience will have a competitive edge and be the most successful in today's marketplace. To be able to provide your customers with a personalized experience, you must utilize market segmentation.
What is Market Segmentation?
Market segmentation, also referred to as customer segmentation, is your ticket to providing your customers with a personalized experience. This marketing tactic refers to breaking down your target audience into groups based on their shared preferences and needs. Some examples of ways to segment your customers could include their demographics, geographic location, and buying behaviors. By taking the time to segment your audience, you're able to better target your marketing efforts and maximize your ROI.
What are the Benefits of Market Segmentation?
Here are several reasons why you need to take advantage of market segmentation:
Better Focused Marketing Efforts
Segmenting your customers into groups based on their shared preferences and needs will allow you to hone in on one specific type of customer and serve them with relevant content. By sharing tailored content with these customers that addresses their most important criteria, you'll be able to run more effective marketing campaigns.
Optimal Marketing Mix
The classic marketing mix consists of product, price, place, and promotion, and breaking down your target customers into segmented groups will help you to nail the best marketing mix strategy for your business.
Too many businesses make the mistake of trying to please everyone with their products. By segmenting your customers, you can be more intentional and think about the features that will satisfy your target market.
By being able to hone in on a specific customer group, you'll have a better feel as to if your product or service has an elastic or inelastic demand. If you see that your target customers are so loyal to your product that they won't look elsewhere, you should price your product higher. Segmenting your customers will help you to be in-tune with their price range so that you can price accordingly and maximize your profit.
The Secret Ingredients to Mastering Market Segmentation
While most businesses are familiar with market segmentation, few know how to implement an effective segmentation strategy. Here are 4 secret ingredients to include in your segmentation strategy to help you get the most out of this marketing tactic:
1. Clear Goals
Surprisingly, many businesses launch marketing campaigns without taking the time to establish what they want to accomplish with the campaign. When you're clear with what you want to accomplish with your marketing efforts, you'll be able to more effectively segment your customers and serve them with personalized content that best meets their stage in your customer journey.
One of the benefits of digital marketing is the wealth of data that comes along with it. This data is extremely useful in helping you to segment your customers based on their unique preferences, interests, behaviors, and stage in your buyer's journey. Analytics is also a crucial ingredient in helping you to master market segmentation as you can use the data to test your existing marketing strategy and make tweaks when necessary to optimize your results.
3. Customer Journey
You won't be able to nail market segmentation unless you take into account the customer journey. Your contacts will be in various stages of your sales cycle, and segmenting them by their stage in your customer journey will help you to earn more engagement with your marketing campaigns and bring more opportunities across the finish line.
When segmenting your customers, it's easy to become too granular with the criteria that you use to group your customers. Avoid the temptation to over-segment your customers. A best practice is to implement the three-adjective rule--if you need to use more than three adjectives to describe the customers in a group, it's too complex. By keeping your criteria simple, you'll be able to gain more meaningful conclusions from your segmentation strategy.
Being aware of your customers' unique needs and having an understanding of where they are in the buyer journey will empower you to segment your contacts in a way that drives more conversions and boosts your bottom line. However, knowing how to approach market segmentation is easier said than done. That's where we can help.
Let New York Ave Help with Market Segmentation
Our creative team at New York Ave is passionate about helping your business to develop a personalized digital marketing strategy, and one of the ways that we're able to accomplish this is by helping you to segment your customers so that you can run more effective marketing campaigns.
Are you interested in learning more about segmentation and how this powerful marketing tactic can help your business to generate better results? If so, contact us at New York Ave today to get the conversation started.