What is market segmentation?
Market segmentation assumes a group of potential customers have similar attributes, allowing us to understand their personality types, wants and needs to market to them more effectively. For example, if we split potential customers for a local football team into groups, we may observe the following categories:
- Single young males who attend matches with their friends.
- Dad’s who take their children to matches.
- Families; mothers and fathers who attend with their children.
Each category observed will have different motivations, both emotionally and rationally to fulfil.
Why do I need to segment my markets?
Put simply, the most successful businesses are the ones that understand their different customer segments and provide messaging and solutions to these audiences, that turn knowledge into repeat business.
What benefits will my business see from using market segmentation?
Using the example we highlighted above around local football teams, lets consider the different issues each customer experiences approaching game day:
Single young males who attend matches with their friends
Young males in this category will most likely be driven by football. They don’t yet have the daily pressures of life to worry about, however they also don’t have the disposable income to attend the amount of matches they would like to.
Considering this group spend a significant amount of time online, social media advertising would be a great place to feed their fascination around the team, providing updates, match day team news and highlights following the game. For the number of young males that heavily interact with the news, discounts/ promotions to matches can be offered to them in limited numbers to create demand. This fills up empty seats amongst a number of brand advocates that will promote the team amongst their friendship groups through word-of-mouth.
Dad’s who take their children to matches
This category contains Dad’s who have been heavily invested in their local team their whole life and are beyond keen for their children to support their team too. A number have the disposable income and will often forfeit other niceties in life to share this special part of their life with their loved ones.
Adult season tickets are amongst the most expensive for this reason. However, when considering their children attending too, this can begin to add up even for the most affluent. Providing a discount to their children to come on individual match days, or for the season will support both attending the games. Not all Dad’s are on social media, so a much wider communications strategy will have to be considered to include local press, radio and social media.
Families; mothers and fathers who attend with their children
This is a very different category to consider. To begin with, most won’t be frequent visitors as the cost is simply too prohibitive. However, it’s important the football club captures one or two members of this audience’s attention, who could in turn become more frequent visitors.
This can be achieved through social media, targeting the son/ daughter who support the team; listening on the radio and watching match highlights. Family promotions can be used to encourage them to ask their parents about going to a match. Alternatively the mum/ dad could be targeted with a similar promotion through the local morning radio station.
As you can already see, marketing (and sales) is never a one-size-fits-all approach and the groups above could be split even further, with even more wants and needs explored.
How do I perform market segmentation?
To ensure you’re performing market segmentation effectively, it’s important to first consider your research; the level of knowledge you have around your customer will ultimately affect the success of any marketing campaign.
You can learn more on the importance of market research and understanding your customers here.
It’s critical to understand the following about your customers:
- Gender (if appropriate)
- Age or age range
- Likes and dislikes
- Hobbies and interests
Finding this information out needn’t be challenging either. If you sell products to consumers, go and spend some time in-store speaking with them, or if you work in services spend some time out with your sales staff. You’ll be astounded at the amount you learn!
If you would like us to support creating some questions for you to start asking your customers free of charge, get in touch here.
What else do I need to know?
It can take time to segment your markets into groups but we promise it’s worth it! Don’t try and define every group all in one go, start asking your customers questions and see where the similarities lay, tackling it week-by-week.
Over time you will build a valuable resource of data which you can use to segment your markets and begin developing targeted marketing strategies and campaigns that convert. One failing of most marketing campaigns today is their inability to consider their smaller audiences, which in-turn leads them to creating very broad marketing which doesn’t resonate with anybody or sell.
At Need to Know Marketing we love providing information for SME’s so they can grow. We also understand this work can be time consuming and difficult to begin with. To assist you, we provide a free of charge one hour consultation, where we have an open discussion about your business objectives and what you’re looking to achieve.
Following the consultation we will provide you with a marketing strategy, advising how we recommend meeting your business objectives through marketing. If you are interested in knowing the cost of our services, you can use our calculator as a guide.
“Of all of our inventions for mass communication, pictures still speak the most universally understood language.”