When looking at behavioral data, they might see that many of their customers like to shop online. Based on this information, they could then either open an online store or stat advertising their online marketplace more. As another example, a clothing company that primarily targets middle-aged women might decide to start selling kids clothing as well. They could introduce these items and market them to their current customers, encouraging them to buy them for their kids.
Market segmentation can also help businesses to focus their efforts, which enables them to establish a brand identity and specialize in a particular type of products. A brand that tries to appeal to everyone in their marketing will come off as generic and unmemorable. It could also leave customers confused about what the brand stands for and what kind of company it represents. As your company grows, you can expand your offerings, but when first starting out, it can be challenging to differentiate your company if your product offerings are too broad.
Market segmentation can also help to inform other important business decisions regarding how you get your product to customers. These decisions may involve matters such as pricing and distribution. Businesses can use segmentation to help them decide on pricing that maximizes sales while keeping customers happy.
Companies may consider demographic information such as income levels. Paying attention to seasonal demand changes can help businesses time special deals to boost sales. Market segmentation can also help companies to determine the optimal strategies for the distribution of their products. Some groups of people, for instance, are more likely to shop online, while others are more likely to shop in a store.
Companies can also decide which stores to pitch their products to based on where their market segment shops. Their customers may, for example, shop at luxury boutiques or bargain outlets.
Looking at geographic data can also help a company decide where to set up a new store. To take control of your segmented audience data, you need the right data tools, along with the right partners. Working with Lotame provides you with both. We offer tools such as our data management platform , which you can use to collect, organize, analyze and activate all of the data you gather.
Organizing your data in our DMP helps you get a better understanding of your audience. You can easily create audience segments using our DMP. We also provide a variety of other tools such as our data exchange , which gives you access to thousands of third-party audience segments, and our cross-device technology, which enables you to serve sequential messaging to users across multiple devices.
As the leading independent DMP provider, we are highly agile and responsive to our clients. We can help you improve your understanding of your audience to enable enhanced content personalization and ad targeting. To learn more about our solutions and how we can help you get to know your audience better, contact us today. Find new customers, increase customer engagement, and grow revenue with first-, second-, and third-party data. Target users based on behaviors they've displayed off-site or to reach users on other properties.
When it comes to data, understanding the differences between data providers and the segmentation they…. Market-leading location platform integrated with Lotame DMP delivers additional targeting depth and contextual mobile campaigns….
Privacy Center Careers Request a Demo. What Is Market Segmentation? Types of Market Segmentation 5 Benefits of Market Segmentation The Importance of Market Segmentation Market segmentation can help you to define and better understand your target audiences and ideal customers. Types of Market Segmentation There are many different kinds of market segments you can create. Actions taken on a website: You can track actions users take on your online properties to better understand how they interact with them.
You might look at how long someone stays on your site, whether they read articles all the way to the end, the types of content they click on and more. They are not data-focused and require research to uncover and understand. For example, the luxury car brand may choose to focus on customers who value quality and status.
While the B2B enterprise marketing platform may target marketing managers who are motivated to increase productivity and show value to their executive team. Related: 4 types of market research to fuel your marketing strategies. While demographic and psychographic segmentation focus on who a customer is, behavioral segmentation focuses on how the customer acts. These activities may relate to how a customer interacts with your brand or to other activities that happen away from your brand.
A B2C example in this segment may be the luxury car brand choosing to target customers who have purchased a high-end vehicle in the past three years. The B2B marketing platform may focus on leads who have signed up for one of their free webinars. Geographic segmentation is the simplest type of market segmentation.
It categorizes customers based on geographic borders. Geographic segmentation can refer to a defined geographic boundary such as a city or ZIP code or type of area such as the size of city or type of climate.
The marketing platform might focus their marketing efforts around urban, city centers where their target customer is likely to work. Use the following market segmentation process to learn about your audience and find new marketing and product opportunities. If you have existing customers, start your market segmentation process by performing an audience analysis.
An audience analysis allows you to learn about your customers and begin to identify trends that exist within your current customer base. Use these market research questions to guide your research. Go right to the source and conduct interviews with existing customers, past customers, ideal customers, and prospects and leads. Ask questions that help you fill in the details of all four types of market segmentation.
If you have a sales team that spends a lot of time working with customers, use them as a resource. Interview them to find commonalities or trends they often see while working with your customers.
Your business likely has loads of data that can help you get to know your customers. Use your customer relationship management tools and point-of-sale systems to find trends related to behavioral segmentation. Pull data that shows how much customers spend, how often they visit your store, and the type of products and services they buy. First time visitor: Hey, learn about our latest collection! Returning visitor: Join our loyalty program and start saving! Working with online wine club Vinomofo , we used behavioral segmentation to target three distinct audiences: new visitors, returning visitors, and returning clients.
Returning visitors who had already subscribed but have not redeemed their coupon yet were reminded on their first order incentive. This targeted approach focused on purchasing habits reached a Though the most common types of market segmentation are demographic, psychographic, geographic, and behavioral, there are other types that are also worth considering and can offer excellent opportunities in the right context.
Technographic segmentation identifies and groups customers with regards to the role technology plays in their lives. This might mean recognizing groups of early adopters when marketing new technologies. It might also be as simple as recognizing the device users access the site from and presenting deals differently. Consumers accessing an online phone store via the Safari internet browser might be more interested in Apple products — and can be shown these as a result.
Generational and life stage segmentation both expand on aspects of the demographic approach. Identifying customers by generation allows for broad but distinct approaches depending on age. Life stage segmentation, however, works similarly whilst divorcing life experience from age itself.
Instead, it groups customers by factors including marital status, home-ownership, and whether or not they have children and more specific still by considering the ages of their children. Bank of America, for example, has successfully used life stage segmentation in their digital marketing strategy. From there, the customer would land on a custom microsite designed specifically for their segment. Transactional segmentation is based on previous interactions your customer has had with your brand.
Offering free shipping to all their customers would have been too expensive, so Yieldify targeted a specific transactional segment of their userbase — offering free shipping to those with a set value of items already in their carts. Picking up on information like this is a particularly effective strategy across multiple industries, including top competitors to mass global retailers like Amazon , presenting e-commerce businesses with the best understanding of their customers, and encouraging return visits.
Whilst the above marketing segmentation strategies mainly focus on B2C organizations, Firmographic segmentation can be extremely useful to those in the B2B world. This segmentation strategy allows B2B companies to better understand and target their audience and marketing campaigns.
This process is very similar to the way B2C marketers would use demographic segmentation. This market segmentation process can help form an effective B2B marketing strategy by identifying target customers and tailoring marketing efforts to these specific customer segments.
Dive into these segments to cut down on time and resources to understand your target audience. Or tap into potential consumers that you have yet to reach. Demographics are generally less invasive to collect than other segmentation types. Geographics are the study of your customer based on their physical location, which can affect more physical interactions in the market. Consumers grouped in similar areas may share similar preferences.
For example, consider a company that is advertising a lawn care service that utilizes a subscription model. The company would likely be more successful in targeting a suburban area where residents need extra yard care.
The campaign would be less successful in an urban area, where consumers might be more interested in a food delivery service. You can use firmographics to describe the attributes of firms or businesses. Firmographics are to firms and investors as demographics are to people. Companies can use this type of segmentation to determine whether or not a smaller firm is apt for an investment.
With millions of firms worldwide, businesses can use firmographics to identify prospects based on size, scale, and funding. You can also breakdown firms into sections of:. Investing in a smaller firm or company always comes with a risk. Therefore, investors have to be precise in segmenting venture opportunities to minimize that risk. For example, before investing in a new application, venture capital firms look for company strengths.
Making your segments too small or specialized Segments that are too small will be more challenging to organize or inaccurate, and they can distract from your objective. Like sample size, an over-segmented group can yield data that is not statistically or directionally significant. Not allowing your segments to change Stay focused on ROI. Targeting and positioning are the next steps in the roadmap following market segmentation.
To evaluate the potential commercial value of a segment, use these strategies to assess the following criteria:. After settling on a target segment, move on to product positioning, which presents the benefits of your product to the chosen target segment. A simple way to evaluate your best positioning opportunities is to map them out. Follow these steps to create a simple product positioning map:. When collecting massive amounts of market segmentation data, keep the more extraordinary brand or marketing in mind.
Rather than relying on one or two sole strategies to characterize your customer segments, combine the efforts of multiple strategies. For researchers, this allows for a complete perspective on target customers. Marketing segmentation allows companies to define and optimize future products and advertising your product to consumers in the future. Don't leave your market segmentation up to a manual process.
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