- It's no mystery that the success
of a business hinges on having customers
and in order to have customers,
you need to find them and in order to find them,
you have to message to them and to message to them,
well, you have to know them.
If you're marketing
without really knowing your customer, stop.
The process of finding
and knowing your customer is accomplished
through customer segmentation.
What you're doing is taking your broad target market
and breaking it down into smaller groups of people
that have a lot in common.
When you have focused customer segments,
you save money because your marketing is more effective.
So, to start segmenting,
you need to define your ideal customer.
Take the broad market and divide it into segments
organized by multiple attributes.
These attributes can combine demographics,
psychographics, behaviors and needs.
Demographics factor in age, gender,
marital status, income and education level
and this is your broadest targeting.
You might target say 24 to 45 year olds
who make less than $50000 annually and are single,
but this isn't quite specific enough of a segment.
If we put that audience in the room,
how similar would they be really?
Would they all love sports for example?
Probably not, so you need to layer.
One approach to layering is by looking at psychographics
and this classifies a group of people
according to opinions, beliefs,
values, attitudes and interests.
So, we might create a customer segment
based on initial demographics
and then add in that this audience
values environmentally conscious companies
and likes reading books.
Members of that audience will have a lot more
in common with one another.
You can also use relevant behavioral attributes
to describe your target customer.
Here, you might identify consumers
based on an action they take
and how frequently they take it.
This could be say,
people who buy a cup of coffee every day
or those who watch at least three YouTube videos per week.
Another market segmentation technique
is needs-based segmentation.
And with this approach,
you divide the market into customer segments
that each have distinct needs.
Take the Nest thermostat for example.
For some, it's valuable as a way
to reduce their energy usage.
For others, it's useful to turn on the heater
at a vacation property.
And for others,
it might be a way to monitor the temperature
in a child's room.
Same product, but with consumers
that will receive different messaging based on their need.
You want to identify segments
that you feel have a high likelihood
of needing or wanting what you're selling.
Once you have your segments,
you'll be able to build campaigns
that speak directly to that customer.
To succeed at marketing,
you must have specific segments.
You can always add more as you find success.