How To Perform Audience Segmentation For Your Business

Introduction

In today’s digital world, the customer has information right at his fingertips. Getting the right information to the right customer can make all the difference between making sales and failing. If you know how to perform audience segmentation for your business, then you can reach the right customers. Ultimately, you can achieve your business objectives. A survey reveals that a surprising 65% of marketers almost never conduct audience research. In addition, marketers who perform audience segmentation are over 3 times more likely to achieve their marketing goals. This article explains the nuances of performing audience segmentation.

You-have-to-perform-audience-segmentation-for-your-business — You have to perform audience segmentation for your business

Introduction
What is audience segmentation?
The importance of performing audience segmentation for your business
Types of audience segmentation
Some examples of audience segmentation
How to perform audience segmentation for your business
Tips to consider when performing audience segmentation for your business
The bottom line

What is audience segmentation?

Audience segmentation is a process whereby you categorizes your audience into subgroups using similar traits or behaviors. It enables a business tailor and personifies its content to each subgroup.

The importance of performing audience segmentation for your business

Define target audiences

First, the message your business communicates to prospects is different from that to new customers. Similarly, you do not communicate the same way to new customers as to existing customers. In other words, you are defining your target audiences.

As such, the benefits of performing audience segmentation includes a more effective awareness campaign, increase in number of new customers and increased retention rates of existing customers.

Define a better USP

Second, you end up giving a better Unique Selling Proposition (USP) to your audience because you know them better. You also know their pain points and how you can meet them there. Consequently, your marketing efforts become better than those of your competitors.

Improved sales leads and conversions

Third, a natural consequence of audience segmentation is improved sales leads and better conversion rates. Ultimately, this improves the bottom line of your business. For instance, when you are able to categorize your audiences by their age, location, purchasing habits, and so on, you can create more effective, targeted digital ad campaigns.

Reveals possibilities for market growth

Furthermore, audience segmentation can help you identify new markets to expand into. The research may reveal new insights about your customers that spur you to put more marketing efforts there.

Better business decisions

Moreover, a consequence of audience segmentation could be a change in pricing or distribution method. For example, upon finding out that the major target market for a particular product involves high income earners; you may want to change your pricing strategy.

Types of audience segmentation

Before you can perform audience segmentation for your business, you have to know the types of audience segmentation.

Demographics

Here, you collate general facts about your audience. Such demographics can include age, gender, income level, education, marital status, race, geographic location, profession and so on.

Certainly, you have to know the income level of your audience as a factor in your pricing strategy.

Behavioral patterns

In another vein, you can group your audience based on certain online actions. For example, you could consider how often they buy online, their seasonal shopping behavior, what items and services they buy often and so on.

For instance, if you know how often they buy online, you can properly set up your retargeting options for such audiences.

Psychographics

With this type of audience segmentation, you are interested in your customer’s emotions, interests, values, goals, wants and personalities. In other words, you want to know how they think. Subsequently, this can help you emphasize certain qualities of your products and services to that subgroup.

Stage in the buyer’s journey

Another type of audience segmentation is along the path of the buyer’s journey of your business.

Awareness

Your customers at this stage are getting a first contact with your business. It could be on a search engine which leads him to your website. It could also be on social media. Your activities here will differ from other activities for customers on a different stage of your buyer’s journey.

Consideration

Here, your customers are still researching on what their interest is. It is also called the thinking stage. They may concern themselves more with highlights and features of products for example.

Decision

This is also called the “action” or “buying” stage. Your customers have identified the solution to their need and want to take action. They may also be checking for best prices and alternatives. Could this be where that special offer incentive might just come in?

Loyalty

Customers have to be put through an after-sales stage. It is not all about “oh, so they have bought from me. That is all”. Surely, you want them to come back and you want to retain them as customers. So what are your loyalty packages? Do you have customers and friends discounts? what about offering shipping or delivery discounts? Do your sales representatives smile and tell them to come back?

Level of engagement

Another type of audience segmentation you might consider could be engagement level of your customers. For instance, you may want to reward more active and loyal customers with loyalty offers. Factors that you can use to determine engagement level include a customer’s browsing history, purchase history; social media likes and follows, reviews and feedbacks or even newsletter subscriptions.

Preferred device

What if 80% of your potential customers of a particular product view your content using mobile devices? Imagine how much business you could be losing if you do not optimize your contents on that product for mobile devices.

Firmographic segmentation

One aspect of your business you should not ignore is Business-to-business (B2B) relationships. You can use firmographic segmentation to segment businesses in the market that may become your customers. You could use criteria such as industry, location, number of employees, revenue and so on.

Life stage segmentation

You can decide to segment your audience by life time achievements such as attending college, getting married, having children or retiring. For example, the needs of a newly married couple may defer from those attending college.

Some examples of audience segmentation

Demographic segmentation

A good example of demographic segmentation is where a business targets high income earners for its luxury product. Another example is where the same business targets a market with low income earners but with high population density.

Psychographic Segmentation

If your business is marketing a luxury perfume product, you may want to emphasize quality and status. Similarly, if you are marketing software to bank managers, you may want to emphasize productivity and value.

Behavioral Segmentation

Sales follow up statistics indicate that cold prospects say “no” up to 4 times before saying “yes”. This highlights your need to retarget customers who have had an interaction with your brand previously. Additionally, you may pay particular attention to customers who have signed up for free webinars or actually purchased your product in the past.

Geographic Segmentation

Are busy metropolitan areas likely to need your product more than more rural areas? Your geographic segmentation may therefore target those who live in urban centers.

How to perform audience segmentation for your business

First, you have to conduct audience research. Your objective is to be able to create your customer persona which is the second step.

Conduct Audience Research

Clearly, you want to find out more about your audience. You can use the following sources for your research.

Customer surveys
Focus groups
Running split tests
Website analytics
Data from your CRM
Insights from social media analytics
Social listening

In addition, you can find out customer wants and needs by using Alexa’s Audience Overlap tool and Competitor Keyword Matrix tool.

Second, you have to create a customer persona.

Create a customer persona

It is necessary to create customer personas. A customer persona is a mock-up personality that mimics your ideal customer. It should contain the demographic information and other segmentation data. In other words, you are walking in the shoes of the customer so you can identify their pain points and how you can alleviate them. Thereafter, you separate those personas into groups.

Study the trends and identify market opportunities

Third, identify what market segment opportunities exist. These are trends that can drive your new marketing tactic or opportunity. Are there identified problems your business can solve? What are your Unique Selling Propositions?

Thereafter, using your audience research and customer persona, you can identify what opportunities are revealed.

Confirm the opportunities and research the competition

Furthermore, prior to launching your marketing campaign, you have to do further research. Is there a good product market fit? What is the interest of the market? What competitors are there? Alexa’s Share of Voice tool for instance, can help you identify existing brands. Thus, you can know how to differentiate your brand from theirs.

Track your results

Moreover, you may want to test your market ideas before full implementation. You can try with little adjustments that you optimize as you go along.

Tips on how to perform audience segmentation for your business

Make the segments detailed enough but not too specific.

When the segments have enough details, they become actionable insights but when they are too specific, the audience may become too small.

Keep your business goals in mind

Segment across different channels

Email marketing is often ignored by many businesses. But do you know that it is one of the most effective forms of marketing? You may just find that you are ignoring a particular segment of your audience if you do not consider various channels. Other examples of channels for communication include social media platforms, websites, blogs, videos, digital ads, and so on.

Be flexible and adaptable with your tactics

You should not change a winning formula. On the other hand, if a method you are using for your audience segmentation is not effective, you may have to adjust it. Perhaps, you can create a new subgroup or alter the current one.

Organize and personalize your content

The whole point of audience segmentation is to particularly reach out to niche prospects and make them convert. When you create your content, your audience should be able to identify with it. They should not feel like it is a general content for faceless consumers.

The bottom line

The market out there is predominantly made up of red oceans. That is to say, the competition is quite tough and businesses have to keep differentiating their brands. Knowing how to perform audience segmentation can just give your business the edge. When you combine the different types of audience segmentation, you can further personalize your content and reach your important customers.