Market More Effective With Customer Segmentation 2019
You can’t be all things to all people. You may have heard that before. But let’s update it to this: Your business and products can’t be all things to all customers.
Let’s say you work at Mazda Canada and need to market the new Mazda6 sedan that comes standard with the latest high-tech gadgets. Try and picture one ad that will sell that car to any customer – young, old, male, female, in any Canadian region.
It’s pretty hard, right? At best, you may come up with an ad so generic that it becomes completely ineffective. By attempting to advertise to everyone, you’d end up appealing to no one.
Customer segmentation is when you group current and potential customers based on their behaviors and who they are.
It helps you market to customers better so you don’t, for example, promote a 2-door sports car to a mom who needs to chauffer her 5 kids to various after-school activities. This targeted marketing can get you closer to your business goals.
Of course, for customer segmentation to work, you should figure out what your goals are ahead of time. Do you want to boost sales, get more interactions, up to your newsletter signups, convert new customers, etc.?
Once you have a goal, target fast conversions (an easier segment to target to reach your immediate goal) or focus on gaining long-term profits (a segment that is harder to win but has the most potential overtime).
After you’ve chosen a goal and which type of result you want to target (fast conversions or long-term profits), start thinking like your customers.
Ask yourself: Why do your customers use your products or services? What need does your business fulfill for them? Once you’ve answered those questions, get more detailed and look for patterns.
Do all of your customers have the same needs? Do certain products appeal to a specific type of customer? Which product do you want to promote right now?
Now you can start grouping your customers into segments, using data and analytics to help.
You can segment your customers by where they live (geography); their age, gender, or income (demographics); or their interests, values, attitudes, opinions, and lifestyles (psychographics).
After you’ve figured out what your main segments are, think about how each group’s needs differ. It helps to look at the questions you asked yourself during your prep work.
Finally, figure out which segment and it's specific needs will help you reach your business goal better, and how those needs will change the way you market and talk about your business.
Let’s see how this would all play out by imagining a vegetarian Tex-Mex restaurant called Freddy’s Fauxjitas. Their goal is to get more delivery orders.
They check out their current customers’ needs and find that their business fulfills a need for healthy yet authentic-tasting Tex-Mex food.
Going deeper into their research, they realize their customers’ food preferences are split between those who want it spicy and those who like it mild. They begin segmenting their audience so they can target these 2 customer groups better.
Freddy’s Fauxjitas then looks at what type of food each segment wants the most: spicy or mild.
They realize that northside dwellers who are 25 to 49 years old and workaholics tend to like spicy food the most.
This segment places more delivery orders (AKA the business goal) and is full of loyal customers. Freddy’s Fauxjitas knows it’s more valuable (and easier) to target them instead of convincing less loyal segments to order more.
Based on this insight, the restaurant creates marketing that positions themselves as the best delivery service for Northsiders craving healthy, SPICY Tex-Mex food.