The goal of any marketing campaign is to get the right message in front of the right people. But achieving that goal can be a challenge. That’s where market segmentation can help. Rather than aiming too broadly and wasting advertising dollars, you target only the people who are most likely to become happy customers.
If you’re new to the idea of market segmentation, you may be wondering what its purpose is and how it can improve your marketing strategy.
Source: Appier
The Purpose of Market Segmentation
The purpose of market segmentation is to split the market into smaller groups that have similar behaviors, needs and wants. Splitting your market this way makes it easier to create more personalized and targeted marketing messages.
Segmentation also allows your brand to better understand your ideal customers and your audience.
Ultimately, the goal is to maximize your marketing efficiency and dollars. It allows you to create more meaningful and impactful content and advertisements rather than putting out a generic message.
There are several types of market segmentation, each serving its own purpose:
Behavioral
Behavioral segmentation groups customers together based on their behaviors, including their:
- Online shopping habits
- Usage
- Actions on your website
- Loyalty
- Desired outcome from your product or service
Demographic
With demographic segmentation, customers are grouped together based on their:
- Age
- Occupation
- Income
- Education level
- Marital status
- Gender
- Etc.
Demographics are one of the most common and basic types of segmentation. Demographics are often combined with other segmentation types to narrow down the market even further.
Geographic
Another common type of market segmentation is based on geographic data, which groups customers together based on their location. Geographic segmentation is useful if you want to target customers in a particular location who meet certain demographic criteria.
How Market Segmentation Can Improve Your Strategy
Now that you understand the purpose of market segmentation, you may be wondering: Do I really need it?
Segmentation can benefit your marketing strategy in many ways.
Improve Your Marketing Campaign Performance
One of the most obvious benefits of market segmentation is that it can improve your campaign’s performance.
Rather than sending a generic marketing message to your entire audience, you can send targeted and personalized messages to each group. Taking this approach allows you to appeal to the customers in each segment and improve conversions as a result.
Expand Your Reach
Through market segmentation, you can identify customers in your audience who are underserved. Maybe you’re not really reaching these individuals through your current marketing strategy.
With segmentation, you can send tailored messages to these groups to expand your reach and customer base.
Improve Product Development
Market segmentation also helps businesses create products or services that better meet the needs of their customers.
Through segmentation, you get to know your audience and their needs, wants and behaviors. Armed with this valuable information, you can create products or services that solve their problems.
Final Thoughts
The goal of market segmentation is to help your business market its products or services more effectively. Segmenting your market allows you to create personalized and targeted marketing messages that help improve conversions.