This article first appeared on December 3, 2010.
I’ve heard a lot about customer segmentation but I’m not sure how this really works. How can I identify different consumer groups and work out who, exactly, I should be targeting with my marketing?
Customer segmentation is mandatory from a marketing perspective. If you don’t do this, you have massive wastage of your marketing funds.
What it really means is segmenting your customers into groups so you know who and how to “target” them. If we use 4-wheel drive cars as an example, you may have a number of different customer segments:
- Male drivers who like to go off track driving on the weekends.
- Mums who like the size and safety of a 4-wheel drive to taxi kids around.
The way you would communicate to these two segments are very different but they are both customers.
For example, for the mums the key message is safety and capacity and you may try and get some publicity coverage or run ads in a magazine like Woman’s Day.
For the men, the key message is outdoor fun with his mates and you may try and communicate this through the sports pages in a daily newspaper.
Another example may be if you are offering a service, like a local pizza home delivery:
- If this is targeting teenagers for a quick takeaway the key message may be price and you can do this via social media or letter drops in the local area.
- If this is targeting mums who want to get a quick meal for a family on her “night off”, the message would be about the nutrition of the pizza and the convenience of the delivery.
I hope this gives you a guide on how to first segment and then determine what will influence the customer and how to reach them so that all your marketing funds can be used with the maximum impact and therefore sales returns.
Depending on your budget, you can purchase consumer data from companies like Roy Morgan. This is very beneficial as it breaks down the segments, not only into the types of consumers, but the quantity of consumers in each segment.
This can be done based on any product or service and then allows you to make decisions on where to spend your funds based on the potential return, ie. which segment is the largest.