I Need To Segment My Market, But I Don’t Know How

Does a 21-year-old football player in Alabama buy shoes the same way as a 65-year-old retiree in Alaska?

Of course not. And that’s exactly why you need to segment your market.

Wait – what’s market segmentation?

Market segmentation is the process of dividing your customers into smaller groups based on their characteristics, preferences and buying habits. By dividing your market into distinct groups, you can make smarter marketing decisions that boost sales, improve your products/services, break into new markets, increase customer retention and build a healthier bottom line for your business.

As user data availability and quality increases, it’s becoming easier – and more important – to define your market segments. Here’s how to get started:

What’s the best way to segment your market?

It depends on what type of business you have (B2B or B2C), as well as several other factors. Our advice?

Start with the basics and follow a process:

  • Gather data and assemble your team. You will likely have to conduct market research (i.e., surveys and interviews), but you may already have useful data in your website analytics and CRM software. Bring together team members from marketing, customer service, sales/business development and any other customer-facing department to participate in the project.
  • Define distinct groups of buyers. Decide which criteria you want to segment your market by. Groups can be segmented by one or more of the following criteria:
    • Geography (Customers may differ in important ways depending upon where they live and/or work, e.g., climate, population density, access to public transportation.)
    • Demographics (e.g., age, gender, salary, education, family size)
    • Firmographics (Primarily used in B2B segmentation, this includes factors like job title, duties, industry, company size and more)
    • Psychographics (e.g., values, motivators, personality traits and opinions that guide decision-making and behaviors)
    • Behaviors (Sometimes, it’s practical to segment your market based on their purchasing behavior, i.e., the types of products/services they buy)
  • Ensure those segments are usable. A good segmentation analysis should yield groups that are:
    • Measurable. The differences among groups should be clear and directly related to purchasing criteria or behaviors.
    • Accessible. Each group should have ideal channels for marketing to them.
    • Substantial. Logically, segments should have realistic financial resources and be likely to purchase from you. In addition, each segment should have enough potential (in terms of revenue dollars) to warrant a customized marketing approach.
    • Actionable. Your groups must be unique enough to respond differently to your marketing (otherwise, what’s the point of separating them?).

Marketing segmentation is part science, part art. As you go through these steps, stay open-minded and flexible. If your first round of segmentation exercises doesn’t give you actionable segments, tweak your process and parameters to find the best fit for your marketing needs.

Apply what you learn to build a stronger marketing machine.

Once you’ve clearly defined your segments, leverage what you learn to improve your website’s:

  • Structure. Do you need to add or change pages to address each audience you’ve defined?
  • Copy. Your web copy (and all your other marketing copy, for that matter) should address your customers’ key needs, challenges and desires. If your segmentation results reveal substantial differences from group to group, make sure your copy incorporates/reflects those differences.
  • Images. Do your images properly reflect/relate to the range of segments you’ve defined?
  • SEO. Do you need to update your on-page or technical SEO to drive traffic from each market segment?

What other digital trends are shaping marketing 2020?


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