Are you creating content and launching campaigns but still not getting any leads? Perhaps, you’re targeting the wrong people. And this is a common mistake sales and marketing teams make.
Targeting the wrong audience or targeting everyone in your list leads to generic marketing campaigns. And no one likes interacting with generic content. So, what’s the solution? Market segmentation.
But what is market segmentation? Read along to find out. This blog discusses market segmentation, its types, and how it can benefit your business.
What is Market Segmentation
Market segmentation segregates your target market/audience into approachable groups based on demographics, shared interests, behavior, etc.
The motive is to bring similar people together and create personalized sales and marketing strategies for each group.
With market segmentation in place, you can create content specifically meant for a particular group of people. This way, your content is highly likely to be interacted with, which means more quality leads and better conversions.
What are the types of Market Segmentation?
Here are the common types of market segmentation.
Demographic segmentation divides the target audience based on their demographics, i.e., age, gender, income, race, occupation, etc. This segmentation approach is based on the idea that people with similar demographics have similar needs.
Practical example: The campaigns for gaming laptops are usually targeted at young males with a disposable income.
Geographic segmentation is technically a subpart of demographic segmentation that divides the audience based on their geographic location. According to this segmentation, people living in a particular location have similar interests or needs.
Practical Example: A company that sells snowball launchers will target individuals living in countries like Russia, Canada, or the USA and not some tropical country like India or Haiti.
As the name tells, behavior segmentation divides the audience by how they behave. For instance, consider their decision-making patterns such as purchase frequency, consumption, usage, etc. According to this segmentation type, a customer’s behavior or habits indicate how they’ll buy in the future.
Practical Example: If a customer has been loyal to a business, the company might try to upsell them because of their behavior (loyalty).
This segmentation works specifically for B2B customers. It is focussed on which organization a person works at, the number of employees, present software subscriptions, revenue, etc.
Practical Example: Let’s say a company sells lead generation services to larger companies. Now, it can use firmographic segmentation to find large companies with 500+ employees and surpass $10 million in revenue without wasting time targeting all businesses.
While it may sound similar to behavioral segmentation, psychographic segmentation is different. Instead of considering a person’s actions, psychographic segmentation considers their lifestyle, social status, and personality.
Practical Example: Take a luxury jewelry brand, for example. Now, the company will target people who can afford expensive jewelry like business class individuals, actors, artists, or other individuals with high social status.
How can Market Segmentation benefit your business
Here are some of the ways marketing segmentation is useful for your business.
Saves you time and money
Market segmentation helps you locate and target your ideal audience better. It enables your sales and marketing teams to focus on high-value prospects saving you time and money.
Enhanced brand image
Market segmentation helps you create content or launch campaigns for a specific group of individuals. This will make your would-be customers think that you understand them well. And that’s pretty good for your brand image.
Lower customer acquisition costs
If you know exactly who has disposable income to spend on your product or a location where your product could be in demand, you can acquire customers easily. The entire sales cycle would reduce, and so will the efforts to move the prospect across the sales cycle, saving you acquisition costs.
Targeting the right people with the right content increases their chances of converting them. And if there are more conversions, there’s more revenue.
When you know who to target, you can easily help your team create effective sales and marketing strategies that are personalized and more effective.
How to start with market segmentation
Market segmentation helps you divide your audience and market into small chunks which are easy to approach or target. So, find your ideal market segmentation approach, create the right strategies and experience better profits.
However, if you’re new to this concept, reaching out to an analytics company that offers market segmentation services professionally is better.