The customers we cater to today are far more selective and have higher standards than ever before. There are more products and services available on the market, which means customers are more focused on choosing products that they find suitable based on their personal preferences. Expecting a single marketing campaign to reach all of them would be a mistake.
Today, segmentation is the key to optimizing your marketing efforts. Even when you’re selling the same products, targeting different market segments in a different way can help turn your marketing campaigns into effective efforts with high ROI. Here are some tips to keep in mind if you’re just getting started with segmentation.
Manage Data Meticulously
The key to successfully identifying market segments and targeting them effectively is good data management. A wealth of information about the customers can really help you identify and understand them better. However, not managing that information properly can easily lead to confusion and mistakes.
There are a lot of tools that can help you gather and process information about customers and the market in general. By using advanced marketing analytics, for instance, you can understand the customers you are already reaching as well as those you want to target next.
Separate basic information such as demographics with the more advanced metrics like purchase habits and media consumption. The former is useful for identifying market segments and determining if they are within the target market of your products. The additional data, on the other hand, will help you understand more about market segments and formulate the right marketing campaigns to reach them.
Evaluate and Revise
A lot of marketers make the mistake of sticking with segmentation for too long, thinking that the groups will remain relevant. A lot of bigger, more established brands have failed to maintain their market share because they continue to target market segments that are no longer there.
Yes, market segments are changing. The market is changing. Each consumer group will also respond to messages differently at different times. You only need to look at the different social networks to realize that the market segments you’re targeting are evolving just as rapidly as the market itself.
Today, you may be able to reach a younger audience through Instagram. The same approach may not be effective in 6 to 12 months’ time, because consumers in the targeted segments may start using other social networks more actively.
When trying to identify market segments using existing customer data, try to avoid averages. A group of customers may spend an average of $150 on your products, but that doesn’t really say a lot about the market segment. Instead of using averages, try to dig deeper and look at distributions.
You will find more specific sub-segments with unique characteristics once you start taking distribution into consideration. As a result, specific marketing efforts can be geared towards these sub-segments and you can enjoy a higher ROI through careful targeting.
Segmentation is not always straightforward, but the right data analytics tools and good sources of information will make segmentation much easier to handle. After all, knowing specific market segments to target is the first step towards optimizing your entire marketing efforts.