Why Market Segmentation is Essential to Your Business
If you are told “segmentation” when talking about marketing what comes to your mind?
It is likely that you immediately think about the segmentation of your email list. Segmenting your emails is very important to improve the engagement and conversion rate of your customers.
However, although we think, very often emails when talking about segmentation, there are several other possibilities that concern it. This is why we will look in more detail at the multiple marketing communication channels that can (and should) be segmented for better results. This is the reason why segmentation as a whole, is so important.
What is Segmentation?
Segmentation is actually a way of dividing a given group into several subsets, so-called segments. Each segment has as a denominator a quantifiable criterion, for example, the age, the industry in which they work, or the city they live in.
Many companies say they have the same message for everyone, a message to all customers. Yet, their clientele includes several types of people. This, therefore, reduces the effectiveness of the message, as few will feel directly targeted.
The selected segmentation criterion must help to find homogeneous segments of sufficient size and it should be operational. How A sector operational? It is said to be operational when it helps to support it specifically. The size of the selected segments must be sufficient to allow the profitability of a specific approach to these segments.
There are several benefits to doing segmentation of your customer base. This allows you to develop a stronger and more focused message. As a result, it makes your business more efficient. It also allows you to better define your customers and thus, better know which marketing tools are used to reach them.
What to Look for When It Comes To Segmentation
Geographic Data: One of the most common ways to segment your customer base is through geographic data. You can use multi-level geographic data for marketing your business. For example, by segmenting your customer base by age group, you are able to highlight which category holds the largest share of your sales. Thus, you can adjust your advertising message to further develop this strong market for your business.
Product Category: You can also define your segments through the products or services they have purchased. Defining this list will allow you, at first, to see which product or service is the most efficient for your company. In addition, it will also allow you to better define what type of information you could send to each one of them. Indeed, you will be in a better position to cross-sell (upselling) by transmitting personalized information on products or services that could be complementary to the one already purchased by the customer.
Communication Channel: It is also possible to segment your customers with the communication channels that you have contacted. By determining this type of segment, you will be able to develop strategies to efficiently reach each customer. For example, if you make a list of people who are already in touch with you by email and have expressed interest in a product or service, you will be able to send them information about it through their “favorite channel”. You will have much more power of typing than if you use communication tools that they do not use.
What Segmentation can do for you?
The question must be, “What segmentation can’t do for you? “ Indeed, segmentation applies to almost every aspect of your business. A step often forgotten or neglected, the main purpose of segmentation is to increase the effectiveness of your marketing approaches. By creating segments, you limit the risk of missing your target.
In addition, by working to develop distinct groups, you will be able to develop products that are more representative of your clientele rather than pleasing everyone. You will also be able to implement more personalized marketing communication tools to help your sales representatives generate more sales.
In conclusion, segmentation offers many benefits for all types of businesses. If you have any questions, need more information or would like to develop a segmentation strategy or any type of content for your company, do not hesitate to contact us anytime.