When you start developing a marketing strategy, the textbooks tell us that the buyer persona is one of the first things to define. However, with time, the concept of a target audience gets too broad and generic to achieve the most impressive results. This is where market segmentation comes in.
What is Market Segmentation?
The basic definition of market segmentation is when your target audience is divided into smaller categories that share similar characteristics
Putting Market Segmentation into Action: Effective Marketing That Works
The key point of market segmentation is to further use it to develop your targeting and positioning
- STP (Segmentation, Targeting, Positioning) Model
- Targeting: assess which one can potentially respond better to your offering, thereby bringing more profit
- Positioning: define how to go about placing your product in front of each segment and will be able to narrow down your key value proposition
Key Criteria
Geographic: country/city, urban/rural etc
Firmographics
Think of firmographics as demographics for B2C market segmentation
- Take into account the size of the company, the culture, industry, location, and more.
- Segmenting customers based on their customer lifetime value allows you to focus on products and services they need rather than trying to draw them in with offers they historically don’t value.
Geographic Segmentation
Divide your customers based on their geographic borders
- Segment them according to: City / State / Country / Zipcode
- Radius around a location
- Climate Rural or urban
- Example: Gap sells a variety of clothing styles, so they segment their audience according to climate
How to Gather Intel for Market Segmentation
External: use Semrush’s Market Explorer tool
- Internal: use your CRM system’s data or Google Analytics
- The former reveals basic info about audience demographics and user behavior
- Can be used to learn about each customer segment’s response to various tactics
Demographic Segmentation
Target market segmentation based on demographics can be one of the most effective ways to target specific customers.
- You can uncover the demographics of your audience easily by using Facebook Audience Insight, Instagram Audience Insights, Google Analytics, etc.
Psychographic Segmentation
This is all about the target audience’s minds
- Knowing what they care about on a day-to-day basis allows you to create content that they engage with consistently and share with family and friends
- Personalities
- Hobbies
- Interests
- Values
- Goals
- Lifestyles
