It’s no mystery that the success of a business hinges on having customers. In order to have customers you need to find them. In order to sell your product to them you have to know them.The process of finding and knowing your customer is accomplished through marketing segmentation. Remember earlier when we talked about the need to tackle marketing by breaking it down into its components? It’s the same idea with your customer. Without segmentation, marketing to your customer takes a lot of time, money and effort. When you take the time to properly identify and segment the customer, it’ll help you focus your marketing efforts towards driving the right messaging to the right person at the right time.
Before we get into the specifics of how to segment, let’s talk about the main types of customer segments. We’ve got geographics, which is segmenting customers by their physical locations to determine say, the counties, states or zip codes where current and therefore likely customers live. You also have demographics, which would be segmenting customers into groups based on age, sex, race, religion, education, marital status, income and so on. Another very valuable segment is psychographics.
Here you’ll segment customers by purchasing patterns, beliefs, values and attitudes about themselves, their families and society. A combination segment is geodemographics. Here you’ll likely merge geographics, demographics and psychographics. Geodemographics is based on the idea that people who live in the same area tend to have similar backgrounds and share in their consumer mindset. This works well for suburban areas but is more difficult in urban areas where the elite can live across the street from the middle class.
And finally we have benefit segmentation. This is a broad segmentation where you group customers based on the benefit they seek out from your product. Now that you’ve got a basic understanding of segmentation, how do you use this to your advantage? Well you’ve got two starting points. One, you have no idea who your customer is or two, you already have customers. If you don’t know who your customer is you’re going to really dig down and go segment by segment to determine what your ideal customer looks like.
Where do they live, where do they shop, what do they do for a living, what is their gender, and so on. Look at each segment and try to pick the key traits your customer would have. You can have two or three different customer types within a segment but be specific. If you already have customers then you need to start finding patterns within your customer data. If you’re a local business with a storefront, geographics is going to be an important starting point. You’ll want to understand how far customers have traveled and map that data back to your sales.
Do you notice that people from a particular area are contributing to more sales volume? Do you notice that you’re not getting any sales from an area that you target and expect to? If you have a brick and mortar you can survey each customer, what is their average age, gender, sex, race and so on? The goal is to collect enough data to feel confident you’ve identified the best customer segments. You can’t target everyone, you have to be selective and identify your niche. By having segments you’ll be able to evaluate your marketing objectives based on whether or not your message and the delivery mechanism behind that message will reach your audience.
Put a different way, you need to know what the high value segments are so you know how to talk to them. If your most valued customers are female, well your marketing likely won’t include photos that might be more associated with men. So as you sit down to identify your target market, write out a small paragraph to each persona that you’re looking for. To do this you’ll want to follow five steps. First, describe their physical description and a sentence about their background. Second, write a sentence about what they want.
Third, describe their problem. Fourth, identify how they buy and finally, determine the best way to communicate with them. For an energy drink company this might sound like, Travis is a male between 25 and 30 years old who sports a beard, is married and has one kid under three years old. He works a job as a landscape manager so he starts his days early. He wants to feel focused at work and show up with energy to start his day. He doesn’t like coffee and has a hard time feeling alert and awake in the morning.
He’s a loyalty buyer so he’ll purchase based on a recommendation from a source he trusts,either a friend or someone he follows online. The best way to communicate with Travis is through word of mouth marketing or through a free offer presented via email. Now that you’ve seen an example of a persona, create a few for yourself.