Universal spray and pray campaigns broadcasted to a faceless mass are a thing of the past, brands that flourish in this hyper competitive marketing landscape are those that ditch the one-size-fits-all approach and use marketing segmentation. Customers expect brands to understand and cater to their distinctive needs and preferences by crafting and delivering experiences that resonate and provide value. This is where marketing segmentation comes in, acting as a powerful tool to unlock deeper customer understanding and unleash the true capabilities of personalization.
What Is Marketing Segmentation
Marketing segmentation is the strategic process of classifying a broad target market into smaller groups with similar characteristics to easily manage them. By segmenting the customer base in smaller cohorts, brands can gain a deeper understanding about the audiences, tailor marketing campaigns and promote products that effectively resonate with them, eventually boosting engagement, conversions and CLTV.
Marketing segmentation can be approached from varied dimensions, depending upon the set goals and customer data on hand. Listed below are a few of the most common categories of segmentations.
Demographic Segmentation
Dividing users based on shared demographic data points like age, gender, marital status, education, family size etc. This is a rudimentary approach which might not paint a clear or complete picture. For instance, targeting millennials solely depending on age might miss a significant segment that skews older or younger depending on the product or service.
Geographic Segmentation
Splitting users by location to target them with products or services based on geographical characteristics like, country, state, city or zipcode etc. Particularly useful for brands with localized offerings or varying marketing regulations across regions. Picture this, a company selling winter wear; their marketing efforts in Amsterdam will significantly differ from their campaigns in Alaska.
Psychographic Segmentation
Grouping users based on psychological traits like values, interests, lifestyles, attitudes and more.. These aspects can help marketers tailor messaging and product recommendations that resonate with specific consumer mindsets. For example, a brand selling sports gear will target a segment that prioritizes health and fitness with campaigns that highlight the performance benefits of their products.
Behavioral Segmentation
Sorting customers based on the behaviors they exhibit like past actions and interactions with the brand, purchase history and campaign engagement. By closely monitoring and analyzing the users in each cohort, brands and marketers can pin-point high-value users, forecast future behavior and actions and personalize the customer journey for them accordingly. A well crafted behavioral segmentation strategy would allow brands and marketers to target users with special offers or deals to nudge them towards a conversion.
Objectives of Marketing Segmentation
Dividing (Bifurcating) a broad audience into distinct groups is not just a marketing exercise – it’s a strategic move with powerful objectives. Here’s how market segmentation helps businesses achieve overall success
Develop The Right Product
The power of segmentation enables businesses to gain invaluable insights into the needs and preferences of different customer groups. This allows brands to develop products and services that address users’ pain points and optimize costs by allocating resources on features that the users require.
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