Even though mass marketing tactics will give you results, trying to get every consumer out there interested in your product is a time-consuming task. Not to mention that it requires a lot of thinking, work, and most importantly, money to be effective.
In today’s world, mass marketing simply isn’t a viable option for small businesses. Instead of using the “one-size-fits-all” approach to marketing yourself, why not target specific groups of consumers? Why not use the power of customer segmentation?
Why You Need Customer Segmentation?
You’ve probably heard of customer segmentation before. However, do you know what it means? In essence, the process of customer segmentation clusters your customer data into different groups, which share certain characteristics.
That allows businesses to create more dynamic content, and personalise their brand message for their customers. In turn, that helps their marketing efforts be more effective.
How successful customer segmentation is? According to a study by Havard, a lot. Harvard Business School, for instance, discovered that out of roughly 30,000 newly-launched products every year, 95% of them fail due to poor customer segmentation efforts.
What Are Important Segment Descriptors?
To successfully segment your audience, you need to take the right approach. A sophisticated approach will allow you to see the big picture. You need to categorise your customers correctly.
More often than not, customers are grouped under these categories:
- Demographic, which includes all of the basic customer information such as gender, age, education level, and income.
- Geographic, which looks at specific areas in which customers and clients are located, and this descriptor can be broken down into specific areas.
- Behavioral, which describes how are customers using your product, and includes transactional behavior such as browsing, for example.
Of course, there are many more segment descriptors, but you should start by segmenting your customers by these first.
Benefits of Customer Segmentation for Business
As previously mentioned, segmentation will allow you to make better use of your money, stay on budget, and gain a competitive advantage over your competitors. But that’s not all. Far from it. Here are some of the biggest benefits of customer segmentation for businesses:
- Finding New Marketing Opportunities
While you’re asserting your customers into different groups, you may be able to identify new marketing segments. If that happens, you can easily alter the focus of your marketing campaign, and make it fit the new customer segment.
- A Stronger Branding Strategy
Customer segmentation allows you to find key motivators of your customers. That allows you to see why do they like your product. In turn, you can strengthen the aspects of your branding strategy your customers find appealing. That will strengthen their connection with your brand.
Improving Your Distribution Strategy
Whether you’re aware of it or not, segmentation can help you find out where your customers shop. You can then tweak your distribution strategy, and target outlets where your products are sold in larger volumes. That would only result in increased sales.