Internet Marketing

What is Marketing Segmentation?

When you advertise your products and services, your goal is to reach a specific audience. This audience is the group of people who you believe will become your customers, based on a number of factors. You want to ensure that the money you spend on advertisements turns into sales.

This is where marketing segmentation can benefit your business. Marketing segmentation, also referred to as customer segmentation, allows companies to cater their advertisements and other marketing materials to better match the needs and desires of their target audience.

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How does marketing segmentation work?

You can divide potential customers in groups based on their wants, needs, and interests. These divisions allow you to better understand your audience and cater to their needs.

You create segments based on demographic information, like age, gender, and location, and further segment them using attributes like marital status and family status. You can also create segments based on spending habits, interests, and needs. In most cases, these groups will overlap in certain areas. These overlapping areas allow you to create advertisements that fulfill the needs of both groups.

For example, let’s say you’re creating a marketing campaign for diapers. Your audience could be described as almost anyone with an infant or toddler – but there are many different segments within this audience.

One family within your audience might have two children, a relatively low household income, and reside in an urban location, while another could have four children, a high household income, and a home in a rural area. Though they share the common need of diapers for their small children, their decision-making process may be different when selecting a brand and product.

The lower-income family might care about getting decent diapers for a lower cost, while the higher-income family is comfortable spending more money, but want to know they’re getting high-quality diapers. With marketing segmentation, you could create marketing campaigns that cater to each of these audiences.

In one campaign, you could focus on the quality of your products, and in another, you could focus on their competitive pricing. This way, you can appeal to both segments, and show them that your products meet their needs.

How marketing segmentation can improve your strategy

It can be a long process to break consumers down into groups by their wants and needs, and it takes time to narrow down your focus into specific groups that will buy your products. The benefits of doing this, however, can have a significant impact on your campaign success.

1. It helps you cater to your potential customers

You can focus on the needs of a certain group when you use segmentation. In the case of the diapers, for example, there is a large segment of people who need diapers. You need to understanding the factors that influence what diapers they purchase. You can better understand how to advertise to potential customers if you know what factors contribute to their purchases.

You also make customers feel cared for when your company addresses their specific needs. When you create content that meets the needs of each of your potential customers, you’ll be much more effective in showing them that your company is the right choice.

Segmentation makes your advertisements feel personalized, even if you’re advertising the same product to different groups. By focusing on specific needs, you can reach specific parts of your audience, and more effectively than you would with one generic ad.

2. It helps you learn more about your audience

You can learn a lot when your audience is segmented. As you learn more about the individual groups within your audience, you’ll learn who you need to advertise to, how to do it, and what points will appeal to them.

You can also create targeted advertisements instead of blanket advertisements that don’t really target anyone. Your business can tailor to the needs of different groups and utilize various platforms to get your message across to these groups.

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3. It helps you identify gaps in your products

As you learn more about your audience, you may also be able to create new products to fit their needs and interests. The more you learn about your customers, the more effectively you’ll be able to gauge what other products they’re interested in - and if you don’t offer them already, you have the opportunity to expand your line.

As you research your segments, you may even find an overlapping need amongst groups that is not being fulfilled by any current products. Segmentation will help you find these gaps, create new products, and launch new campaigns with the confidence that there is a market need for what you’re offering.

This can lead to increased sales and revenue that you may have missed without segmentation. So if nothing else, this is reason alone to spend some time learning more about your audience.

4. It gives you insight on your marketing success

You can analyze where you stand with certain groups based on segmentation, and see which groups you’re reaching most effectively.

If your sales are high within a specific segment, this indicates that your advertising strategy is meeting the needs of that group. Then, you can use this information to inform your strategy for this segment moving forward, and create even more successful campaigns in the future.

On the other hand, you can also see which of your campaigns are less than successful. If your results are particularly low within one segment, this indicates that your campaigns aren’t effectively reaching this group. Then, you can work to improve your strategy, and do a better job of reaching that particular subset of your audience.

This benefits your company in the long run because it shows you where you’re falling short with your marketing strategy. And when you use this information to improve, you’ll be able to create better advertisements to reach more potential customers.

In some cases, you may find that a particular segment isn’t a great audience for your business. While this can be frustrating, it allows you to focus your marketing efforts (and budget) on reaching more qualified leads.  

How marketing segmentation benefits consumers

It’s clear that marketing segmentation helps businesses - but it’s beneficial for consumers, too. Consumers don’t want to be shown irrelevant content. They want to see information that’s interesting and relevant to their wants and needs.

When you use segmentation to deliver tailored content to consumers, you’ll be less likely to annoy them with irrelevant information and ads. If someone is already interested in a particular product or service, they’ll be much more likely to engage with your brand.

Ready to start using marketing segmentation?

Marketing segmentation can help you learn more about your target audience, create better marketing campaigns, and generate more revenue. And if you’re ready to add it to your strategy, WebpageFX can help.

Contact us today to speak with a strategist and get a free quote. We can help you start using segmentation to improve your strategy today!

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