Businesses have been trying multiple marketing techniques to reach their customers each day. But they often find themselves at a loss because of the shrinking American attention span. That is why they deploy smart tricks like adding a read timer, creating a linked table of contents, or splitting up video content to better engage their audience.
However, a non-targeted marketing strategy will still attract only a handful of people. This is where market segmentation comes to the rescue. For instance, if you know your target segment, you can invest in influencer marketing. It is an excellent way to get your message across to your target demographic and build trust among them.
What is Market Segmentation?
Market segmentation refers to the process of dividing consumers or markets based on specific characteristics that are relevant to marketing. Thus, you need to gather accurate information about your target audience, including metrics such as industry, position, level of education, age, company size, and more. This effective segmentation will help improve your open rate, leads, and transactions.
Take a look at some of the factors that help categorize these market segments:
📷
Image Source: https://www.ebcg.com/benefits-of-customer-segmentation-in-sales-department/
· Demographics are one of the most crucial forms of segmentation. It can include factors like age, gender, race, income, education, family situation, and religion.
· Segments based on psychological beliefs are aimed at separating the audience based on their personalities. So, you can categorize a group based on factors like their lifestyle, attitudes, interests, or values.
· Behavior-based segments are concerned with actions, such as customers that are more likely to subscribe to your mailing list or add to a shopping cart.
· Geographic segments are concerned with where customers live. It can be based on factors such as climate, population type, and cultural preferences.
Benefits of Market Segmentation
The market segmentation process is commonly used by businesses as it helps them understand and predict how a particular group of people will respond to a marketing strategy, plan, or promotion. This identification process, thus, offers several advantages that you can use to your benefit.
1. More Effective Marketing
It is the biggest and most obvious benefit of market segmentation. If you know who and where your target customers are, you can choose to invest in opportunities that will yield the best results when it comes to future marketing and customer retention initiatives.
2. More Efficient Spending
It is not just the right marketing techniques, but you can also achieve better returns on investment through market segmentation. It allows you to waste less money on marketing that reaches the wrong audience.
3. Identifies Niche Markets
If you want to scale your business, you should be able to recognize areas of the market that you had not considered before. Once you identify that section, you can develop a market penetration strategy and/or develop new products that are aimed specifically toward these markets.
4. Enables Product Specialization
You can capture a bigger share of your target audience with market segmentation. When you are aware of what your customer wants, you can specialize in a certain area or type of product and gain a competitive advantage over other businesses. This process also allows you to design unique experiences for different types of users with an aim to increase engagement, satisfaction, renewal, and expansion.
As a business owner, you will have to invest in multiple marketing tactics to thrive. You may have to maintain a strong social media presence, create video-based content, or invest in influencer marketing.
However, the success of all these tactics will rely on whether you are offering your customers what they want or not. And, market segmentation will help you recognize these exact needs and understand what it is your target audience is looking for.
