Imagine the following situation: someone chooses an item of clothing in a store and, upon looking at the label, comes across the expression “one size fits all”. For some people, the item may be suitable and comfortable. However, many others may not like the fit or drape. In the context of a business, this has everything to do with market segmentation!
After all, this process allows you to direct efforts and resources to specific parts of the sector or even the public. In Digital Marketing, segmentation helps to better guide all communication and offers several benefits in a heterogeneous — and increasingly competitive — market.
Want to find out why market segmentation is so important for your Marketing strategies? Come with me and I’ll show you more about this practice and how to do it!
Understand market segmentation
A beautiful and extensive garden is usually made up of plants and flowers of different species, isn’t it? Although the final result depends on the combination of types, each one has specific needs.
Some flowers are heat-resistant, while others need more sun. Some fruit trees need more water, while succulents do well even in drier soils.
To take care of the garden completely and achieve the best results, a gardener will need to pay special attention to each species. To make things easier, the gardener can place plants with similar needs closer together, forming different groups.
Bringing this analogy to Digital Marketing, this is what happens when doing market segmentation:
Segmentation involves dividing your audience into smaller groups based on common characteristics. It’s like having leads and customers in a garden, but each group needs specific attention, considering their needs and preferences.
This is a way to personalize communication, making it reach the ideal people. In addition, segmentation is a way for the business to offer solutions that resonate with the target group!
Benefits of market segmentation
The next aspect I want to show involves the advantages that market segmentation can offer to a company’s Marketing.
Overall, it improves the focus of these initiatives and allows you to increase your return on investment (ROI).
Our vision here at Enjoy Minder is also that segmentation directly reflects on the strategic part of Marketing. With it, it is possible to prioritize the target audiences of campaigns and create more specific messages.
This is a way to have targeted communication to attract the right people for each company or objective. As communication becomes more effective, this also reflects on the costs per result of the campaigns.
When the strategy is broader, the tendency is not to be specific about the audience’s pain points, right? So it is common for the conversion rate to be lower, as well as the impact. With segmentation, it is possible to be more relevant and, consequently, more attractive to the audience.
Imagine two campaigns:
- A campaign that does not use segmentation reaches 10,000 people through different communication channels, resulting in 100 of them closing a deal;
- And another campaign, well segmented and that considers the ICP (ideal customer profile) . This second one reaches far fewer people, 2 thousand, but results in the same 100 sales.
Both scenarios have the same absolute number of closed deals. But when looking at the conversion rate, the targeted campaign stands out significantly!
I’m talking about a 5% rate, which is five times higher than the 1% of the generalist campaign.
Another important point to highlight here is the smarter and more targeted use of your budget. In the hypothetical example, it is clear that the maxim “the more, the better” does not fit very well…
Targeting the right way ultimately increases results and makes them cheaper. That’s why it’s so important to avoid generic or “one size fits all” solutions!
Types of market segmentation
When a gardener decides to segment his garden, he can separate the plants according to their light requirements, rule requirements or leaf resistance, for example.
With Digital Marketing, this also happens in market segmentation, as there are several ways to separate the public into groups.
See what the main segmentations are:
Demographic
It uses characteristics such as age, gender, purchasing power, level of education, among other points.
This is the case of a college that creates a segmented campaign for teenagers leaving high school and another for those seeking postgraduate studies, for example.
Geographical
This segmentation divides the audience according to their location, which can include everything from different neighborhoods to cities, states or countries.
A hotel chain can create targeted campaigns for audiences in different states, considering their traditions and typical festivals. Have you ever thought about it?
Psychographic
This approach involves characteristics such as the audience’s worldview, their personality and their lifestyle.
A sports brand can target some campaigns to athletes from different sports and other campaigns to those who want to start exercising outdoors, for example.
Behavioral
Ultimately, this segmentation focuses on the decision-making process and general behavior of the audience.
Think of a supermarket: it can segment based on price sensitivity!
For those looking for deals and savings, it is possible to create promotional actions focused on low prices. For the less price-sensitive segment, create campaigns focused on premium products.
How to implement market segmentation strategies
Now that you know more about market segmentation, it’s time to learn how to put it into practice. The idea is to be able to create groups of customers within your target audience, directing communication and marketing strategies.
Check out what to do!
Market research
It is only possible to create groups with similar characteristics if you know what these factors are, right? Therefore, it is worth conducting research with the public to understand demographic, psychographic and behavioral aspects.
Segment identification
The next step is to select which segments will be part of the segmentation. If the idea is to divide by age, define which age ranges will define the group. If the idea is to focus on the psychographic aspect, select similar values to group the audience.
Feasibility assessment
Before directing your strategies towards groups, you need to identify their viability. Look at the size of the groups created based on these criteria and the attractiveness of these segments. If a group is not able to offer the results of interest, it is better to focus on other characteristics to group the audience.
Development of personalized messages
Have you validated your segmented groups? Great! The next step is to create personalized messages. Based on the specific needs and preferences of each group, define an approach, language and content to speak directly to them.
Implementation of segmented strategies
In addition to taking care of the message, it is necessary to use the appropriate marketing strategies for each audience. This involves defining which channels and approaches to adopt with each audience. This way, it is possible to reach and impact the people of interest more effectively!
The most common mistakes when segmenting the market
My last tip is also very important, because it has to do with mistakes that are very common in market segmentation .
One of them is thinking that it is necessary to segment the entire company, when it doesn’t always make sense! Instead, it is possible to focus on segmenting campaigns, always considering the moment and the business objectives.
There are also other mistakes that need to be avoided, such as:
- Overly broad targeting;
- Outdated segmentation;
- Lack of adequate market research ;
- Use of demographic data only;
- Generic message for the segmented audience;
- Disregarding the customer life cycle.
By avoiding these types of mistakes, you will have a better chance of realizing how segmentation can impact your Marketing team’s initiatives and overall business results!
Now it’s time to organize your audience!
I showed you here that good segmentation can not only increase the efficiency of your day-to-day activities, but also improve the relevance of your message to potential customers!
After all, your audience wants to be treated in a personalized way and this involves knowing their pain points, needs and preferences.
And since the idea is to start improving your business results, request a Digital Marketing diagnosis now, carried out by Orgânica’s experts and completely personalized for you!
