The Basics of Audience Segmentation

If you’re marketing to multiple demographics, audience segmentation ensures you craft a message to each demographic. Here’s some basic knowledge.

What if your business isn’t reaching your entire audience?

It’s natural to think of your business as catering to a single demographic. But audience segmentation is a key to appealing to multiple groups and growing your business.

Wondering how to start using audience segmentation? Keep reading to discover our complete guide!

What Is Audience Segmentation?

We’ve prepared a thorough guide to how you can make audience segmentation work for your business. Before we dive in, though, it’s important to define what this kind of segmentation really is.

It all starts with breaking down a single demographic into multiple subgroups. For example, let’s say that your business is currently targeting millennials.

By itself, “millennial” only denotes someone’s age. But with audience segmentation, you can begin crafting different marketing methods for millennials based on their gender, income, profession, and so on.

This approach obviously takes more time than only marketing to a single demographic. But it pays off in a number of ways for your business.

Importance of Segmentation

Now you know a bit more about what segmentation is. But that leaves us with the obvious question: why is segmentation so important for your business?

The simple answer is that no one marketing approach works for everyone. Marketing that unique audience will come across as generic and boring. Instead of growing your business, this approach is likely to turn people away.

With segmentation, you can craft a custom approach for different audiences. This approach showcases your knowledge of what these audiences want and your ability to provide that to them.

Ultimately, segmentation is one of the best ways to strengthen your customer relationships. That strength translates to loyalty to your brand and your business.

Is Segmentation Right for Everyone?

Audience segmentation is very important. But should every business try this approach?

The short answer is “no.” Factors that influence your decision include your budget and your key audience.

For some businesses, there is simply not enough time and money to pursue segmentation at this time. A struggling startup, for instance, may not have the resources to fully devote to such an initiative.

Other businesses may have discovered a marketing approach that seemingly works well for most of their audience. In that case, such a business may be better off sticking with an approach that works for them.

However, the vast majority of businesses can benefit from segmentation. And if you have the budget to explore segmentation, you will be surprised at the return on your investment.

Keep in mind that clever use of different channels can help you explore segmentation at very little cost. This includes marketing via social media (a channel that also lets you measure customer response in real-time).

Types of Segmentation

So, how do you break your audience down into segments? There are actually several different approaches, and some of them are easier than others.

The simplest segmentation involves demographics. You can segment audiences based on demographic data such as age, profession, income, and so on.

You can actually focus extensively on location as its own segmentation type. For example, a national business can definitely benefit from different marketing strategies for northern and southern audiences.

Psychographics are another good category for segmentation. This includes marketing based on values, personalities, and direct consumer benefits. A good example of this is companies that target millennials with eco-conscious marketing.

Finally, you can segment audiences based on past behavior. This includes analyzing buying history, buying habits, buying schedules, and so on. Knowing what motivates a purchase can help you to adapt your products as well as your marketing.

Choosing Segments

Those are the four key types of segmentation. How, though, can you decide which one(s) your business should focus on?

Start by identifying as many segments as you can. Next, begin narrowing down the list with a few of the following tips.

First, measure the impact of a segment on sales and branding. Are there enough people in this segment to warrant an entirely new approach? And will marketing to them have any negative impact on your brand image for other segments?

Second, assess whether your business can adequately market to this segment with the resources at hand. If those resources are not already available, it may not be worth your time or money to market to such a segment.

Finally, decide whether marketing to this particular segment is in line with your other company goals. This is why behavior-based segmentation is so important: it lets you focus on the groups who will be easiest to win over based on their individual customer journey.

Goals of Segmentation

Is segmentation actually worth it for your business? Ideally, you will start seeing results very quickly.

As with any other marketing strategy, it’s important to set key goals for your segmentation. These goals may include building your brand or reaching more consumers.

Take the overall goals and develop specific KPIs. Next, use analytics to measure monthly progress towards these goals.

Needless to say, measuring these goals is another way you can determine which segments to focus on. In this way, your segmentation strategy should yield better results as the year goes on.

Importance of Buyer Personas

To some people, segmentation can sound pretty abstract. The whole process is driven by data, and it can be difficult to turn analytics and numbers into genuine marketing strategies.

This is why it is important to create buyer personas. These customer profiles help you to put a face to your various audience segments.

It may sound simple, but personas are an invaluable part of this process to your entire team. When your sales and marketing professionals can relate to the different profiles, they will be able to relate better to your actual customers.

Your Next Moves

Now you know how audience segmentation works. But do you know who can make it work for you?

We specialize in optimizing customer journeys and growing businesses. To see what we can do for your own business, all you have to do is contact us today!