Market Segmentation

5 Simple Ways To Assess Your Market Segmentation

Table of Contents

Do You Truly Know How To Segment Your Customers?

 

I have been a customer of a particular cable and Internet provider for many years and through my many stages of living and economic situations.  Despite my thoughts on the monopolization and pricing of the cable and Internet providers in my area, I have been able to tailor my monthly bill to my ever-changing needs.

Marketing Strategists Customer Segmentation Methodology

 

When using appropriate market segmentation analysis and strategies, your business can reap major benefits when using the proper customer segmentation approach when determining marketing segmentation coupled with the most effective assessment tools.

Meeting Exacting Consumer Expectations

 

Luckily, I was able to downgrade from Ms. Premium Cable Queen to Ms. Basic TV and still stick with the same company. This proves how important it is for a business to be able to cater to a customer’s various needs, because one size doesn’t fit all and through quick internet searches, they quickly become subject matter experts on your offering.

 

Marketing Mix

 

It is how niche market niches are identified - by really understanding very specific customer needs.  It is a highly effective market segmentation procedure to help you accurately identify and target potential customers.  It is also how, using the marketing segmentation tools, and proper research analysis, segmented marketing campaigns can be implemented effectively.

 

Customer Segmentation Techniques

 

In short, like you, they can evaluate market offerings quickly, and you want your marketing efforts and your brand to be the winner. They are, in effect, placing themselves into specific target customer segments.  This is very important to realize when you're establishing account segmentation strategies within your CRM.  It is one of the keys to uncovering key customer insights. Your strategic market segmentation approach, when consistently executed, helps you identify market segments that have very precise characteristics.  

 

Many Account Segments

Most companies maintain an enormous number of data points about their customers.  These are often the keys to defining each account segment. For example, knowing the industry allows you to perform effective industry segmentation, while knowing the geographic location of your customers allows you to segment by geographic region. Identifying these market characteristics are some of the key steps in market segmentation.

 

Fun Fact:  Google claims that they analyze 70,000,000 data points every time someone performs a search so that the user is shown exactly what they are looking for.  Want to know how can markets be segmented?  That's how.

 

 

Why You Need to Know How to Determine Market Segmentation

 

To be able to find what “sizes” fits a business’s target, a marketing segmentation strategy needs to be implemented and it may not be as easy as it seems. There are many market segmentation approaches and defining market segments is a mixture of art and science.  But getting right is essential to getting the right market mix in place.  From personal experience, I can tell you that while it would be nice to have marketing segments defined before you start to segment users, even with the best marketing segmentation tools, it is still very difficult to do.  However, successful marketing strategies rely on getting this right. 

 

Marketing professionals play a crucial role in the success of marketing segmentation strategies. They understand the importance of getting things right when it comes to identifying customer needs and preferences. With their expertise, marketing professionals can conduct market segmentation studies that accurately define target segments. By analyzing past customer behaviors and considering potential changes in customer behavior or market conditions, they can effectively segment customers and target marketing activities. Their insights help businesses tailor content and marketing messages to specific customer segments, increasing the likelihood of conversion and repeat purchases.

 

Furthermore, marketing professionals use data analytics to inform product development and upgrades based on user behavior and preferences. They also analyze customer sentiment to make more informed decisions in marketing and promotions. Overall, marketing professionals are instrumental in creating personalized experiences for customers and helping businesses reach their target audience more effectively.

Market Segmentation Studies

 

Conducting valid market segmentation studies can be a challenge. It requires careful research, analysis, and interpretation of data to accurately identify the individual customer or target audience needs and preferences in order to define valid target segments. It also involves looking at a segmentation report and analyzing past customer behaviors to gain insight into how these customers may interact with products, services, or brands in the future. Additionally, market segmentation studies must be conducted in a way that takes into account the potential for changes in potential customer's behavior or market conditions, as well as the impact of different factors on success. This can make it very difficult to accurately segment customers and target marketing activities effectively. As such, it is essential to have reliable data collection methods and well-defined parameters when conducting market segmentation studies. By creating well-designed market segmentation studies, companies can gain insight into how their customers interact with their products and services, as well as identify areas for improvement or growth. This will ultimately help them better reach their target audience and provide more personalized experiences for each individual customer. 

 

Tailor Content to Customer Segments

 

Once these insights are gained, businesses can use the findings to provide tailored content and marketing messages to their target audiences. This can be done through personalization techniques such as dynamic messaging, automated campaigns, and targeted emails. By creating a more personalized customer experience, businesses increase the likelihood of conversion and repeat purchases from existing customers. Additionally, it can also help companies attract new customers with relevant information and offers. 

 

Drive Product Development and Upgrades

 

The data gathered from analytics can also be used to inform product development and upgrades. By understanding user behavior and preferences, businesses can create products or services that better meet customer needs and wants. This helps to ensure that customers get the best possible experience when interacting with a brand’s offerings. It also makes it easier for businesses to identify and focus on their most profitable products and services

 

Customer Sentiment Analysis

 

Finally, data analytics can offer valuable insights into customer sentiment. By understanding how customers feel about a product or service, companies can make more informed decisions when it comes to marketing and promotions. This helps businesses stay ahead of the competition by capitalizing on opportunities as they arise and responding to customer preferences in real-time. 

 

Data analytics is a powerful tool that can help businesses increase efficiency and profitability. By leveraging user data and understanding how customers interact with products and services, companies can create experiences tailored to their target audience’s needs. This helps brands remain competitive in an ever-changing marketplace, while providing customers with a unique and personalized experience. 

 

Data analytics also provides valuable insights into customer sentiment. By analyzing user behavior and customer reviews, companies can gauge how customers feel about their product or service. This helps businesses make decisions based on customer feedback, while being able to respond quickly to any issues that arise. But first, let's explore what market segmentation is.

 

What is Market Segmentation?

Market segmentation is a marketing technique for identifying common characteristics of either people or companies. A market segment can be fairly broad, but the more narrowly you can define it, the more likely you are to get to a customer segment of one.

 

Market Segmentation Consultants


Market segmentation researchers can use a variety of tools, such as focus groups, field observations of actual consumer behavior, statistical analysis and other sampling methods to arrive at fully defined market segments.  These segments then become the inputs into developing your buyer persona's and ultimately your target audience.  Your marketing implementation partner can usually help with this task.

 

You May Find Multiple Market Segments for Your Product or Service

 

One of the many benefits of market segmentation is that you may find that a product or service may seem at first to fit one type of target market but can easily fit into another market if the proper research is conducted and advertised.  There are many segmentation variables you can explore to find your perfect audience.  

 

Marketing to a consumer’s specific needs and wants is not only highly effective but also promotes your marketing edge that is needed for differentiation for other products and services.

 

Evaluation of Market Segmentation 

 

While there are many different methods of market segmentation, there are 4 requirements for effective market segmentation:

 

  • Know What You Sell.
  • Understand the Customer Pain Point.
  • Quantification of the Value of Solving the Pain Point.
  • Identifying Customer Segments Who are an Ideal 'Fit' for your Product, i.e., do they have both the Purchasing Power and need for your product. 

When setting up marketing campaigns, if you keep the above criteria in mind, which, when combined, provide a granular customer segment definition, your marketing efforts will be much more effective.  Your marketing management team will appreciate the higher ROI of your focused marketing campaigns.

 

The Basic Types of Market Segmentation Include the Following:

 

Market segmentation

5 Levels of Market Segmentation

 

  1. Geographic Segmentation – This can be as general as a country or as specific as a particular neighborhood.

  2. Demographic Segmentation – This type of information includes age, ethnicity, gender, occupation, marriage status, life stage, educational level, etc.  It can also include broad classifications, such Baby Boomers, Millennial, Gen X, Gen Y

  3. Behavioral Segmentation – This includes buying patterns, attitudes and knowledge towards products, brands, and services.  Broadly speaking, it includes information about personality traits.

  4. Psychographic Segmentation – Honing in on more psychological aspect, this segmentation includes lifestyle, values, social class, buying power and personality patterns.

  5. Firmographic Segmentation - Company information, including company size, either where a customer works or common characteristics about companies themselves that reveal something about the customer.

Highly Granular Market Segment Development

How to Conduct Market Segmentation

Each of the above represents a basic market segment, and each can be used to target to specific customer segments separately.  It is when you combine them using the build-up method of market segmentation that you get a marketing segment that is useful in Google Paid Ad Campaigns.

 

Build up Method of Market Segmentation

 

The build-up method of market segmentation is a process of gathering data from customer surveys and analyzing it in order to identify the most important characteristics that define a customer segment. This process involves breaking down customer attributes into smaller segments and then building them back up into larger groups that share similar characteristics. This approach allows for more precise targeting of customers based on their individual needs, preferences, and wants, which can be used to develop an effective marketing strategy and it yields better audience segmentation.

You Can Use These Audiences With Google PPC Campaigns

What is a Market Segment in Google Analytics?

How Do You Use Them?

 

One of the most powerful uses of these types of audience segments is by creating audiences within Google Analytics and importing them into Google Adwords, then creating Look-Alike Audiences (Google calls these "similar audiences") based on these imported audiences.  We often also combine market segmentation questionnaires with this information to generate even more focused audiences for our Google PPC clients.  This is how to evaluate market segments for fit - do they convert better, meaning do they have a conversion rate. This is one of the market segmentation strategies for success followed by our Paid Media team.

Social Media Allows You To Achieve Next Level Market Segmentation

Now that social media has become a mainstay in the marketing world, businesses have been able to adapt their marketing segmentation research and analysis in new ways.

A good example is how Facebook is now incorporating market segmentation advertising to target specific users.

Facebook users can now see advertisements popping through their newsfeeds and it is certainly not random. Based on Facebook pages that are liked and profile information, foodies will get advertisements to install restaurant finder applications and mothers will get suggestions to like a baby clothing store page for updates.

Fortunately, many businesses have been able to take advantage of social media to formulate their market segmentation, but of course, there are other ways a business can develop their market segmentation strategy. Here are five ways that any business can assess their market segmentation:

  1. Turn to who you are up against - Conducting an analysis of competitors can shed some light on what works and what doesn’t in comparison to one’s own business.

  2. Get some insight internally – Formulating an internal company analysis will reveal patterns in profit and marketing campaign measurement, which will help guide a business to re-define, expand or simplify their target markets.

  3. Use the information that’s already out there – Using public forums such as the U.S. Census Bureau can provide a business with a wealth of information needed for such information as income levels and the number of children in a household.

  4. Do it your own way – A business conducting their own market research can provide unique and personalized information not available to many other businesses. This type of research can be done through an online questionnaire site, social networking platforms, or by giving people a survey in person at a special event or distinct location.

  5. Dream up your perfect customers – Creating ideal client profiles is an effective way to brainstorm a business’s market segmentation process. This exercise encourages a business to define and specify who their product is really targeting, and to make it into a reality.

 

When using market segmentation analysis and strategies, a business can reap major benefits. With proper segmentation, products and services can be successfully designed or re-designed to meet the consumer's needs, effective campaigns can be executed, and market strategies can be enhanced.

 

Executing a successful marketing segmentation analysis for a business is not always easy due to all the numerous criteria that might fall into various segments but using our four easy assessment suggestions can guide you in the right direction. 

 

How Do You Make Use Of This Within Hubspot?

If you've went through all the trouble and effort to develop a complete picture of your target market segments and have developed an Ideal Buyer Persona and Ideal Customer Profile, how do you make you use it?

 

Tag Every Contact as a Specific Buyer Persona

One of the main benefits of having your marketing, sales and service operations hosted on the Hubspot Growth Suite is being able to tag contacts with buyer persona information.  A key success factor to successful Inbound Marketing and Sales is to develop highly targeted buyer personas.  These are fictional representations of your customers and can be set up in Hubspot.  

 

Once this is done, and you have your content plan developed and aligned with your buyers journey, you have the ability to tag every contact so that it now has 'buyer persona' appended to the contact record.  You can then use this information to send the customer down a path you dynamically customize based on what you know about the contact and the buyer persona they belong to.  You can go much further with process, even appending additional information to the record from 3rd party data sources to further enrich the contact record.

 

Combine Buyer Persona with Past Purchase History

By combining buyer persona with past purchase history, you can create 'offers' on demand to drive cross-sells and up-sells.  For instance, let's say you sell and maintain HVAC equipment to homeowners.  Let's further state your company runs on SAP Business One, a cloud based ERP system, which is fully integrated with Hubspot. 

 

Define Segmentation Accounts in Both Systems

 

By knowing what you sold to them, when, you can use custom objects to remind them of upcoming service requirements, and generate dynamic discount codes for related product and services. Account segmentation in SAP Business One allows you further enhance your view of your segmentation data.

 

All of this can be delivered by field service technicians using iPads in the field, which are running Hubspot in the background.  Hubspot, can then use custom objects to retrieve inventory availability from SAP Business and continue the business process.

 

Added Bonus - Get a Video Customer Review

One of the added benefits to your marketing strategy to having all of this customer segmentation information, and making use of it in a real world scenario as defined above, is that, with the right software, of which there are many such solutions, your field service technicians can ask for receive a video customer testimonial right there on the spot.

 

This too, can be appended via integration and workflows to the contact record.  

 

Monitor Video View Events

By dynamically adding the video to a Customer Driven Video Testimonial Page on Hubspot, you can also use the new testimonials to trigger an event which sends a targeted email to any leads who have viewed video testimonials in the past but who have not bought.  Not a bad time to offer either an incentive or a phone consultation, or even free field service visit.  Those this is an advanced use case scenario, our team has pulled it off before, at scale, with great success.  We did it all on the Hubspot growth suite platform.

 

How Successful Was It?

It worked exceptionally well.  In fact, it worked so well that a HVAC labor shortage was reported in this major windy city🔥

 

Market Segment - Buyer Persona Development Kit

 

In order to help you develop your market segmentation strategy, you need to develop your ideal buyer persona.  That's why, as part of our customer segmentation consulting practice, we offer the Buyer's Persona Kit, which you can get by clicking the button.  

 

Download Your  Developing A Buyers Persona Kit

 

Fortunately, there are many other ways a business can execute their marketing plans and since it is music festival season, take a look at our blog about 4 Marketing Methodology Examples Influenced By Music Festivals.

 

Until Next Time…

 

More reading:

How To Segment Your Customers using SAP BW and CRM

Top 10 Benefits for Financial Analysis in the Latest SAP EP4

Learn What Tools To Use To Investigate IS-Mill Functionality

BusinessObjects Explorer Best Practices

 

 

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Cristina Keleshian

Cristina is an Inbound Marketing expert with international experience in a variety of industries

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