Targeted marketing helps you send the right message to the right people, no matter what channel you meet them on. Think of it as a one-on-one conversation where you address their needs and concerns more personally. Only, you do so with specific tools that give you a chance to speak with many as easily as you do one.
Sounds great, right? Yet if you’re struggling to refine your marketing approach on a more general level, the idea of personalization can seem overwhelming. Where do you begin?
Understanding Market Segmentation
Market segmentation splits potential customers into groups based on their characteristics, desires, and behaviors. It’s about dividing your target market into meaningful clusters.
The more you know about your market segments, the easier it is to incorporate this information into your product development, sales methods, and market strategies. With this information, you can tailor your marketing messages to speak directly to different segments of your customer base.
And that can make all the difference in the world. A HubSpot survey found that segmented emails drive 30 percent more opens and 50 percent more click-throughs than unsegmented ones.
As marketers, we’re taught that brand loyalty is the key to customer retention. Yet creating that brand loyalty isn’t easy—if it were, every company could drive as much traffic to their business as they desire.
Today’s tools make it easy to tailor experiences based on customer interest. It’s what customers want, and businesses aren’t afraid to step in and give them more. In fact, 87 percent of Americans are willing to have various details of their activity tracked in exchange for more personalized rewards and brand experiences.
Are you ready to give them what they want?
How to Split Audiences Into Market Segments
To start a targeted marketing strategy, you need to fully define your market and understand how they will respond in a given situation. It can be segmented in several ways:
Demographic
Target your audience based on gender, age, income, education, social class, and nationality.
Demographic segmentation is often considered the easiest to create. You can use readily available demographic data from third-party vendors, such as government census data, or work with survey and test data to dive deeper into your target market.
Geographic
This includes information on where people live, work, and spend their free time. It can be subdivided by neighborhood, city, county, state, and nation.
Like demographic data, you can solicit customer surveys or use third-party research data for more information. Also consider using operational data such as IP addresses from website visitors.
Behavioral
This includes how a target market interacts with products, services, or brands. Look at how and where they engage with a brand, their social media usage, and the consumer journey.
This is best crafted from information from your existing customer base. The way your customers do business with you is the best indicator of where your next clients will come from.
Psychographic
This considers the psychological aspects of consumer behavior, taking into account lifestyle, personality traits, values, opinions, and interests.
This is best pulled from the people who already know you and do business with you. It’s easiest to gain data and draw insight from your own customers’ voices.
A Step-By-Step Guide to Segmenting
With these four segments in mind, does one stand out to you? There are five basic steps to take while developing a target marketing strategy.
1. Define Your Target Market
You may have done this for other marketing strategies, but this is essential as you continue segmenting your audience. How are people finding you? What are they looking for in your products and services? Where does your brand sit in the marketplace compared to your competition?
2. Choose Your Segment
How will you segment your audience: demographic, geographic, behavioral, or psychographic? You don’t have to limit it to just one. Many brands establish targeted marketing strategies combining segments to build more robust communication with their audiences.
3. Divide Your Market
Although every customer is unique, you will spot patterns as you start analyzing them based on segmentation. Shared characteristics will help you create customer profiles you can use to further refine your message.
4. Know Your Competition
You might know and understand your competition from an overall perspective, but how about once you break it down into segments? Who are your competitors as you target specific segments? If you haven’t taken a chance to research based on these new approaches, now is the time. And as you find them, ask questions like:
- How are they appealing to this target segment?
- How much reach do they have?
- Does their pricing structure differ from how you offer it now?
Every step you take will help you further solidify what you’ll offer and how you’ll target it to a new audience. It can help you find the most profitable sides of your business and develop stronger communications.
5. Implement and Analyze
As you complete your market analysis and identify target audiences with the most potential, it’s time to incorporate them into your wider marketing plan. As you add campaigns and start to see results, analyze outcomes to find where profits lie and watch for peaks and troughs in demand. This will help you pivot to take advantage of things that work and adjust to create more profits within your business.
Work One Segment at a Time
A word of caution: Don’t rush into too many segments simultaneously. Before you move to the next, spend time learning each market, understanding their behaviors and attitudes and what it takes to reach them effectively. Work to maximize profits before moving to the next. These key insights can lead to important clues that can impact your overall marketing plan.
Bring Targeted Marketing Into Your Strategy
As your marketing plan changes and grows, you’ll find targeted audience segmentation throughout your brand’s strategy, helping you set goals and objectives specifically for customer engagement. Better understanding means more meaningful connection with specific groups, giving them what they want, when they want it.
That makes the benefits unlimited. Maximizing impact with your customers in a deeper way leads to increased sales and greater loyalty. And that’s a good place to be.
