Connecting with the right prospects and generating leads that fill your funnel and turn into sales is challenging. Even when you find the right target prospects, it can be difficult to nurture them and keep them engaged. The same type of outreach or level of communication doesn’t work for every lead, and utilizing only one generic marketing strategy to find and build connections is often not fruitful.
That’s where segmentation comes in. Market segmentation breaks down your list of prospects into smaller subgroups for more targeted messaging. It allows you to understand your target audience and what they want. It makes it easy to customize your marketing to communicate effectively, establish meaningful connections, and grow engagement.
Segmentation is the process of dividing your customers, prospects, and target markets into distinct subgroups or segments based on specific characteristics and then building out personas and marketing strategies to match those segments.
Why is segmentation so important?
Segmentation helps you better understand your potential customers and develop critical insights about them. It helps you dig deeper, get to know your customers and target prospects, and identify their defining attributes, pain points, and specific needs. This allows you to create targeted marketing explicitly designed to attract and speak to just the right prospects instead of utilizing one generic message for your entire audience.
When you properly segment your market and target your messaging to those specific segments, you can personalize your messaging to meet the unique needs of a prospect or customer. This leads to higher engagement rates and improved customer loyalty.
The ability to engage with multiple target audiences in different ways that make the biggest impact for each one also helps save time and money. It increases your efficiency, allowing you to spend less time targeting leads and use your resources more effectively.
Segmentation can also lower acquisition costs because it enables you to target specific segments exactly where they are with just the right messaging at just the right time. This leads to greater engagement and higher response rates at a lower cost. It’s one of the best ways to attract and speak to the right prospects.
Types of segmentation
You can segment your audience based on a variety of attributes. These attributes help to understand your target audience better. There are four main types of segmentation:
- Demographic – This segmentation looks at individual attributes like geography, gender, education level, income, or specific position at a company. Demographics are used to describe individuals.
- Firmographic – This segmentation examines company or organization attributes like industry, location, number of employees, or revenue. Firmographics are used to describe specific segments of businesses or organizations.
- Psychographic – This segmentation explores psychological characteristics, such as personality, values, social status, lifestyle, interests, and opinions. It provides a better understanding of the motivations of a target audience.
- Behavioral – This segmentation examines how a target behaves. It is based on purchase behaviors, such as purchasing and spending habits, and how targets interact with brands, such as signing up for email marketing or attending a webinar.
While each of these types of segmentation is distinct, most market segmentation utilizes attributes from more than one of these categories. For example, a business may want to build a target audience located within a designated geographic region, with individuals who hold a specific position at a company of a certain size and have certain values and behaviors. Being granular in your market segmentation allows you to target a specific audience and know the best way to communicate with and nurture them.
How to get started
You are ready to add segmentation to your marketing efforts. Here are the five key steps to follow to get started:
Understand your market and existing customers
The first step in creating market segments is understanding your existing customers and market. Analyzing your current customers’ attributes can show you patterns of characteristics and behaviors that define your ideal customer. It can show you what motivated them, their pain points, and other traits that define who they are and drive their behavior.
Create market segments
Once you’ve analyzed your existing customers, use that data to help determine the criteria you want to use to segment your market (see the four types of segmentation above). Then create personas for each segment. Personas are descriptions of your ideal customers, including all their defining attributes. Building a persona makes it easier to visualize who you want to attract, their behavior and motivations, and the best way to communicate with them.
Create marketing strategies for each segment
Now that you’ve created segments with clearly defined personas for each one, it’s time to determine the best marketing strategies to speak to each of those segments. Segmentation allows for more personalization of marketing messaging and more targeted approaches. Build out a marketing strategy for each segment based on their buyer persona.
Test your market segments
It’s time to test your marketing segments by putting your marketing activities into action. With different segments, certain activities and tactics, such as landing pages, LinkedIn Connection campaigns, pay-per-click ads, or email marketing, could have slightly different versions of activities going on simultaneously, so it’s important to start tracking the data by segment.
Analyze the data and refine
Review the data against benchmark data to determine if the marketing segments are properly delineated and if the marketing tactics are the right activities. Comparing the current results to benchmark data from before the segmentation is the best way to determine what is working and what needs to be refined.
Market segmentation is one of the best ways to define your audience and marketing goals clearly. It lets you get to know your target audiences and provides insight into how to reach out to them with the right messaging and solutions to meet their specific needs.
Contact us to learn more about using segmentation to target the right leads.