Have you ever heard of a ‘push’ strategy’?. That’s the term for the old-fashioned notion of going into business with a design, product or service expertise, and then going about finding as many people as possible and advertising to them in the hope of persuading them to buy your product or services.
A ‘pull’ strategy works in reverse. It entails determining which type of buyer (typology) you wish to provide your products/service to and then designing or procuring products/services which best suit their respective needs.
Why does this work more effectively? Because one size doesn’t fit all.
Unfortunately, a lot of businesses just assume “everyone” will buy their products or sign up for their services. Many mass marketing techniques that are used assume all customers are the same and many savvy business people don’t know how to properly implement market segmenting before developing a marketing plan.
A study done by Harvard Business claimed that in the US, 85% of 30,000 new product launches failed because of poor market segmentation.
So, what is market segmentation and why do we need it to start with?
Marketing segmentation involves dividing a broad target market into subsets of consumers who have common needs and application for the relevant products and services.
Marketing campaigns are then designed and implemented to target these specific customer segments. For each segment you can create a ‘buyer persona’, or ‘customer avatar’, enabling you to gain the ability to tailor your marketing efforts and connect with your target audience to meet their needs and solve their problems.
Correctly using market segmentation allows you to better know your customer base, and align your marketing efforts and messaging strategy. So the more tailored your segment campaign, the more effective and efficient your marketing campaigns can be.
One of the main reasons to use market segmentation is to gain a competitive advantage
So what’s the simplest way than to define your target market segments?
- Psychographic: Grouping your customers into cultural clusters, social status, lifestyle, and personality type.
- Decision Makers: Grouping your customers based on who decides to purchase your product within the household or company structure.
- Behavioral: Grouping customers by product usage. For example; light, medium or heavy users. This stage also factors in brand loyalty and the type of user.
- Distribution: Grouping customers based on where they go to purchase your product, such as online, store or through a catalogue.
- Demographic: Grouping customers by age, income level, gender, family size, religion, race, nationality, language, etc.
Here are some tips for segmenting your target market –
1. Clearly define your segments – Look for segments that the competition don’t even know exist
2. Don’t define your segments too broadly. This will give you a greater opening to a competitor who targets large multi-segments (i.e based on age and gender alone)
3. Set segmentation objectives and goals
4. Create a ‘buyer persona’ – a profile that represents your ideal customer in each segment.
4. Develop communications to suit each segment and their specific behaviours/needs etc
5. Execute your specific segmentation market strategy and monitor and review.
6. Target your potential customers based on buyer personas in social media and nurture those leads into sales.