The Importance of Segmentation in Marketing

No two people are alike.

No two people are alike. But their buying habits are.

So, you know exactly who your ideal customers are right down to the shows they stream and the snacks they prefer while watching them, right? Of course you do, because you—being the savvy marketer you are—have already developed detailed customer personas based on market research and real data about your existing customers. (If right now you’re staring at your screen in bewilderment, check this out before going any further.) The Importance of Segmentation. 

The secret to marketing success? Divide and conquer.

Once your personas are established, it’s time to start segmenting. Market segmentation allows you to subdivide your market along similarities or kinships—the things that members of each segment share in common. And this is what your personas allow you to do. They give you the power to refine your marketing campaigns so you can send personalized, targeted content to each group.

Here are a few examples:

  • Banks don’t need to target homeowners with mortgage offers. That would be silly (and a waste of marketing dollars). Segmentation allows them to specifically reach first-time homebuyers.
  • Hospitals and physicians offices can use segmentation to target people not only by geography but by need, like a particular specialty service. An allergy clinic shouldn’t be advertising to non-allergy sufferers.
  • Restaurants are always trying to fill tables. Some customers visit regularly while others only come in from time to time. Some prefer lunch to dinner (and vice versa). And if the restaurant is a popular Sunday brunch spot, how does it draw people in the rest of the week? All of these problems can be addressed with segmentation.

Look to your base. Database, that is.

It’s a well-known fact that it’s easier to keep a current customer than get a new one. So, if you already have a database full of names, you’re sitting on a gold mine. And if you don’t, take advantage of the infinite technology options available to build one. Connected devices and the social, mobile, analytics and cloud technologies that power them create huge amounts of data. Companies have more options than ever for adding new customers and earning their loyalty. Get on that. Once you have your list, you can use your customers’ interests and motivations to target them in highly strategic ways, resulting in greater gains.

Here’s the bottom line:

Consumers don’t hate advertising. They hate BAD advertising.
They also hate irrelevant brand messaging. Through customer segmentation and personalized marketing campaigns, you reduce the risk of running campaigns to uninterested (or worse, crabby) consumers. Since personalized content is based on known behavior, it’s more likely your target will respond favorably to your message. The odds are also very high that segmented groups will respond in a similar way to pitched marketing activities, allowing you to capitalize accordingly. There’s no better formula for success.