A guide to market segmentation

Ensuring you reach the right people with your marketing campaigns is essential to growing your customer base and speaking to people who are actually interested in your product offering. This is where market segmentation comes into play. 

In this guide to market segmentation, you’ll gain an understanding of the different types of segmentation available, as well as the benefits for your business or brand.

What is market segmentation?

Market segmentation is the process of breaking your target audience down into smaller segments who are grouped together by shared interests and characteristics. By breaking down your audience, you can then tailor your marketing and communication efforts to speak directly to each of these segments. 

Your audience will have different motivations, attitudes, behaviours and expectations, so you need to understand these differences before you can market to them and drive your sales pipeline. 

What are the different types of segmentation?

There are many ways to segment your audience, which can differ for each business, depending on your end goals and KPIs. There are four different types of segmentation that you may want to consider:

• Behavioural 

• Demographic 

• Geographical 

• Attitudinal 

Behavioural Segmentation

Behavioural segmentation looks at how people behave when they’re interacting with your business, product, services or website. 

Segmenting your audience by their behaviours can provide understanding of someone’s spending/shopping habits and how they interact with your brand via website and social media.

Demographic Segmentation

Demographic segmentation is probably the most common and widely understood type of segmentation, as it looks at standard data points, such as: age, gender, ethnicity and profession. 

This is the easiest form of information to gather on your audience and, when combined with another form of segmentation, can provide a detailed understanding of your customer personas.

Geographical Segmentation

Geographical segmentation is segmenting your audience based on their location. There are many different ways of breaking down your audience by location, including by country, county or postcode, but also by cities, rural or urban areas as well. 

Attitudinal Segmenation

Attitudinal segmentation looks at the personal interests and values of your audience and groups them together based on similarities. It focuses on the emotional needs and thought process of your customer, looking at their lifestyles, motives, wants and needs.

What are the benefits of market segmentation?

It’s important to have a customer-centric attitude within your business to create a compelling customer experience that will ultimately drive sales. Although more sales is the end goal, there are many other benefits to market segmentation, some of which are listed below:

Target the right people

Once you have your segments identified, you can focus your product/service offering to match your specific segment needs. This also allows you to refine your marketing efforts, such as: blog content, email marketing, webinars, and add value to the right customers. 

Ensuring that you are matching the right audience with the right product will help with conversion and your bottom line.

Increase customer engagement

By tailoring your messaging and campaigns to your different audiences, you can start to increase engagement with your business because you’re addressing  your audiences wants and needs.

With increased engagement from your audiences, you’re more likely to create brand affinity and long-lasting relationships with customers. 

Helps with product development

Your customer will be able to give you an insight into what products are or aren’t working well. By having this information direct from your target audience, you’ll know how to develop and continue to grow your products, services and business. 

Ensures you have a competitive edge

When you know who your audience is and what they like, you can begin to understand why they would choose you over your competitors, how you can create long-lasting relationships with them through tailored communications and continue to provide top customer service.

In order to create long-lasting relationships with your customers, you need to be successfully talking to the right audience with the correct content. Market segmentation allows you to truly understand who those people are, meaning your marketing and communication strategy is laser focused. 

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