For most businesses there is more than just one typical customer, and many ways to reach each of them.
All marketing is a substitute for face to face conversation, and it follows that the more you can tailor your advertising messages to the specific needs and concerns of each reader, the more effective it will be. Segmentation is a way to work toward that ideal economically, by looking at your universe of customers and breaking it down into smaller groups, or segments, and delivering messages that appeal to the motivating concerns of each group.
1. Will segmentation help?
Begin by considering the different solutions you offer. What kinds of problems do they solve? Who needs relief from that pain? If there are several different problems, or a variety of motivations to seek a solution, then you could most likely improve your results by segmenting your audience.
2. Will it be cost effective?
Adjusting your messages and the means of delivering them to several distinct groups of people may initially add expense to your marketing budget. Bearing in mind that this is an investment in higher response and conversion, take a look at how much revenue would increase with better marketing results to see if segmentation will be justified with improved profit.
3. Identify divisions
List all the problems your products and services can solve, along with all the different motivations that might drive people to seek your offering. Now find common characteristics of people in each problem/motivation group. Can you see demographic patterns – age, geography, income and so on? Or psychographic differences – those based on culture, attitude, group affinities, behavior or motivation?
4. Specify group dimensions
Specify and quantify the defining characteristics of each segment. These will be the metrics you use to decide where new prospects will be best reached and served.
5. Create specific messages
The characteristics that helped you define each segment will give you the basis for the messages and emotional hooks that will resonate with each. You will be able to catch their attention and interest more efficiently, which is what successful segmentation hinges on.
6. Choose the right channels
What media channels does each segment use and respond to? The narrower the definition of the segment, the easier it is to find mailing lists, organizations, magazines and websites of specific interest to that group, and the hungrier the audience will be for relevant information.
7. Evaluate your results
Regular, quantified evaluation will give you reliable data on which to base decisions. If a segment does not perform well, consider whether the problem lies in messaging and delivery, or in the definition of the segment. Test and test again to find what works best.
8. Improve your offerings
In addition to the marketing messages and media you use to address each sub-group, consider whether you can reformulate your product or service to specifically meet the needs of different segments of your potential market. The more specialized a service appears to be to its users, the higher up the value scale it will be, and the more profitable it can be for your business.