Wasting money on marketing and impressions that gives you so many leads but not enough conversions? The key is for you to determine how to segment your consumers in a way that will have the biggest impact on your business. Consumer segmentation enables marketing teams to make the most out of their valuable marketing dollars by tailoring their marketing efforts to each specific audience. Save money by reaching the right people with the right message.
Consumer segmentation is the division of potential consumers in a given market into discrete groups that share the same characteristics. Consumer segmentation is an essential means to identify the consumer’s needs. Businesses that identify the “neglected” segments can then outperform the competition by developing uniquely appealing products and services catered to them. Consumer segmentation is most effective when a business tailors offerings to the audience that is the most profitable and serves them with distinct competitive advantages. This prioritization can help businesses develop marketing campaigns and pricing strategies to extract maximum value from both high-profit and low-profit consumers. A business can use consumer segmentation as the basis for allocating resources to product development, marketing, service and delivery programs.
There are several ways to segment the market but the most ideal are the following:
Each style of consumer segmentation has its own unique set of benefits, but combining several styles will create maximum impact and enable you to reach even more specific markets.
Consumer segmentation is a universal technique that can benefit both small business start-ups and global companies across all industries. With billions of people in the world, determining your ideal consumer segmentation technique and efficiently and effectively utilizing it will help you narrow the “pool” and reach the people that want to listen to you, ultimately driving conversions and revenue.
To establish the proper consumer segmentation of your business, you should follow the following steps:
Businesses using consumer segmentation techniques operate under the fact that every consumer is different and that their marketing efforts would be better served if they target specific, smaller groups with messages that those consumers would find relevant and lead them to buy something. Companies also hope to gain a deeper understanding of their consumers' preferences and needs with the idea of discovering what each segment finds most valuable to more accurately tailor marketing materials toward that segment.
By enabling businesses to target specific groups of consumers, a consumer segmentation model allows for the effective allocation of marketing resources and the maximization of cross- and up-selling opportunities. When a group of consumers is sent personalized messages as part of a marketing mix that is designed around their needs, it's easier for companies to send those consumers special offers meant to encourage them to buy more products. Consumer segmentation can also improve customer service and also leads to customer loyalty and retention. As a by-product of its personalized nature, marketing materials sent out using consumer segmentation tend to be more valued and appreciated by the consumer who receives them as opposed to impersonal brand messaging that doesn't acknowledge purchase history or any kind of consumer relationship.
If you are just getting started with consumer segmentation we advise you to try something that has a potential to drive the best results with the least resources accomplished in the shortest period of time. The fool-proof way to get you started with consumer segmentation is by dividing the market based on gender. You don’t need to capture any additional data besides what you already collected. All you need is the first name of your prospects and a playbook with the initiatives that you can potentially test.
Gender-based consumer segmentation is the easiest way to boost your marketing and increase your conversion rate by over 30% overnight. Consumer segmentation has been underutilized for many years and has only emerged as a mainstream online marketing technique is the past few years. What are you waiting for? Be one of the pioneers of employing this technique and make the most out of it!