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Turbo-Charged Marketing: Segmenting Your Target Audience

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If someone asked, could you tell them who your target audience is? Is your sales pipeline filled with relevant leads?

In order to boost the quality of your business leads, it’s a good idea to figure out exactly who your customers are. Looking at all of your customers as a whole can be a bit overwhelming though. Businesses are often as unique as the individuals who run them. Trying to assemble them into marketable groups can be daunting to say the least.

But learning more about your potential customers is what makes audience segmentation so useful in the world of business. It’s one of the best tools out there for assessing your market and planning your market strategy. When you segment your audience, you can divide the entire market into pieces that are more manageable. For instance, you can categorize your market according to income, age, location, needs, and lifestyle—and that’s just the beginning.

How Does It Work?

Segmenting is built on the concept that people make purchases for one of three reasons. They either need to satisfy a need, solve a problem, or make themselves feel better. Not all products and services will fit into every category, so your first step is to decide which one of these three purposes your product fulfills. Then you need to be able to market your product or service according to your customers’ wants and needs.

Market segmentation or audience segmentation is the backbone of your marketing strategy. It enables you to understand your market and focus on important groups of potential customers with similar backgrounds and needs. When you break down your target audience in these ways, you also get a better sense of your competition. For example, if your business offers gift baskets then your competitors might be flower shops and bakeries not just other gift basket companies. If you can’t adequately define your competition, you can’t really compete and you will end up wasting time understanding how those leads ended up in your sales pipeline.

You can see audience segmentation research in action when you pay attention to how companies market the same product to different age groups. Let’s say, for illustrative purposes, that you manufacture and sell fruit snacks. The commercial you air on Saturday mornings when the kids are watching their favorite cartoons will probably emphasize how fun they are to eat and how great they taste. When you sell that same box of fruit snacks to moms watching Oprah your message will probably focus more on the nutritional value, convenience, or affordability of your product.

Now think about how you might market your imaginary energy consulting business to a company in Seattle, Washington with 400 employees versus a company of 150 employees located in Lexington, Kentucky. See where we’re going with all of this?

Segmentation Methods

You can take any number of approaches when it’s time to start segmenting your audience. It doesn’t matter whether your clients are businesses or individuals, the same rules still apply.

Targeting Demographics: When working with individuals we tend to group people into categories according to their age, zip code, level of education, and family size. When dealing with businesses, however, demographic criteria include things like industry, turnover, location, goods or services sold, number of employees, and number of operating locations.

Benefits Needed: Some people make purchasing decisions based on price. For others, things like customer support and convenience weigh more heavily when considering whether or not to make a specific purchase.

Lifestyle Choices: Like people, businesses have personalities. If you market to a business whose culture is exciting and cutting-edge your message will be considerably different than if you market your product or service to a company that emphasizes tradition and conservation.

Buying Process: You may have one audience segment that prefers to talk to an individual when it’s time to buy. They might call a sales rep on the phone or make a face-to-face visit. Another segment may prefer to conduct business online. In order to reach both of these groups, you need to prepare very distinct marketing messages.

Usage and Needs: You can also segment your audience by determining the different uses they have for your services. Do you offer something that is essential to business operations? Or do you offer something innovative and fun?

Segmentation on Multiple Levels

Too often, attempts to segment audiences fall short. Usually this is because newbies with little experience stop segmenting too soon. They find a couple of common demographic segments and then start marketing on a massive scale. But rarely is marketing so simple. Clients don’t fit snuggly into a single category. They are actually quite complex.

You may find that it’s best to break your audience down into multi-level groups. For instance, some groups may be divided first by age and then by income. It’s important to look for these kinds of organic group formations. Trying to force people into segments to make your marketing strategy less complex can backfire. It’s a better approach to accept multi-level segmentation and develop messages for each group. You can expect greater returns despite there being more work.

Using the Results

Eventually, a picture of your ideal customer will begin to materialize from the data. With enough work, you might even come up with a complete description of your ideal customer. Perhaps your business will market to companies with 40 or more employees who offer services in the Midwest and have been operating for five or more years. With the right data, you should even be able to determine how many potential customers exist in a given area.

Now that you’ve done the dividing, it’s time to get out there and conquer. Many of your prospective clients might not know about your company. Maybe others have heard of your business, but they just can’t figure out what makes you any better than those other guys. Once you have determined your target segments, it’s time to channel your resources into making those potential buyers actual customers. And that’s what audience segmentation is all about: more successfully gaining a larger portion of the market and driving quality leads to your sales pipeline.

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