Marketing segmentation: What is it, why’s it important, and how can I improve it?

A good marketing campaign has the potential to transform a brand only if the campaign reaches the right people. So, what’s the best way to target the correct audiences? By using marketing segmentation.

What is marketing segmentation?

Marketing segmentation is the process of breaking a target audience into more manageable, better-defined groups. This practice allows marketers to create more accurate projects and campaigns that please their intended customers, which fuels customer engagement and loyalty, as well as more focused research.

Why is marketing segmentation important?

Marketers are obsessed with making a campaign that is perfect in its content as well as connecting with its audience. It makes perfect sense, then, that segmentation is so crucial. When a customer is known, it sets the table for an entire campaign, allowing the marketers to deliver specific content to the right groups at the right time. Here are some of the main advantages of marketing segmentation.

Helps companies break into untapped markets

One lesser known marketing segmentation benefit is the chance it gives companies to discover new audiences to market to. This can lead to entire new types of customers that might be interested in your products or services. Remember that not every discovery will be fruitful. Though some new audiences will have a lot of potential and not much direct competition, many will also have the opposite.

Improves content and messaging

As marketers, we’re always on the lookout for new ways to craft content and messaging that hits directly with our intended audience.

Of course, our audience is both dynamic and diverse, meaning no one size fits all. When we narrow our focus and split up customers, it improves our messaging and allows us to be creative without restrictions.

Allows for effective expansion of services offered

It’s not always wise to expand upon services offered, since changing things can lead to varying results. However, marketing segmentation makes the process much safer, showing companies what types of features, products and tools would best benefit customers. This reduces any issues customers might have with the current services, and allows for more innovative output.

Lowered costs

The price of marketing to a wide range of people lowers if those people are effectively and accurately moved into specific sections based on their individual needs. You’ll find that each project you start and campaign you undertake is much more cost-effective and requires less guess-work and maintenance.

Types of marketing segmentation

There are different forms of marketing segmentation that result in completely different audience grouping. Here are the most common ones.

Psychographic segmentation

Psychographic segmentation, despite being extremely personal and potentially informative, can be the least-revealing of the segmentation types, especially because of how much work it takes to analyze and interpret the information.

Unlike behavioral segmentation, which separates users based on surface-level traits, psychographic digs deeper for things like personalities and thoughts.

Behavioral segmentation

Behavioral segmentation is one of the main types of marketing segmentation, since breaking groups up based on behavior can be very insightful. This can range from things like purchasing and transactional habits, engagement levels, reactions to specific content, and timing behavior.

Demographic segmentation

Demographic segmentation gives detailed traits concerning people’s age, marital status, race, etc. Demographics allow marketers to specifically target groups that will be more receptive to different campaigns based on an understanding of certain traits.

Geographic segmentation

Geographic segmentation on the surface seems like it allows for groupings of people, which it does, but there’s so much more to it.

By discovering a user’s location, marketers are able to speculate further on economic status, nearby populations, climate and more. These factors can be very revealing and let marketers make accurate project decisions.

Improve your marketing segmentation strategy

To maximize your segmentation efforts, you’ll need to follow a tried and true strategy. Here are some helpful tips to boost your current strategy.

Don’t forget current customers

Customers have a lot of valuable insight they can provide both directly and indirectly. When segmenting users, take notice of the customers already using your service for better accuracy.

Gathering more information about current customers is as easy as using data analytics and asking for their feedback directly.

Market your company’s services and products with specific audiences in mind

Part of marketing segmentation involves identifying how to tweak a product with customers in mind. Also consider the way a service will solve problems for customer groups.

Narrow your focus

It might be a bit easier to keep your groupings general, but that doesn’t mean it’s optimal to stay on the safe side. By taking a more difficult path and narrowing your focus, you’ll make things easier on your teams in the long run, and ultimately be more accurate in your campaigns.

Test the waters

There’s no need to commit to a campaign before knowing how well it’s going to perform. Target certain segments with some A/B testing to make sure you get it done right.

Marketing segmentation Examples

Here are some helpful examples that show how marketing segmentation helps companies. For each one, we’ll use the different segmentation types and give a real-life example to correspond with it.

Demographic segmentation. One example of demographic segmentation would be creating campaigns for different age groups. For instance, one could use different language to target younger people versus older people.

Fast food restaurants do this often, using children’s toys and characters when they’re focusing on kids. They might even have clips from a kids movie with the stars eating the product.

Geographic segmentation. Geographic segmentation allows for groupings of target audiences that give way to geo-specific campaigns. For example, a simple advertisement for snow jackets might be more effective if aimed at audiences in certain climates versus others.

Behavioral segmentation. Behavioral segmentation creates unique real time personalization opportunities. For instance, the timing habits of a specific group could help marketers find the best ways to reach them, like if an email campaign were to be sent out based on digital timing of customers. Companies often do this with holidays, days of the week and seasons. This would be a more defined expansion of that.

Final thoughts

Every marketer wishes their next campaign will be a huge hit, but until they’ve identified and separated their audiences accurately, it will be a huge disappointment. Make sure that your next project is reaching the intended audience, and there’s no telling what you could accomplish.