It sounds simple, but segmentation is something a lot of people overlook. Most companies that set up shop before knowing who their audience is don’t trade for very long. Whether you’re looking at who is already buying your products or who you actually want to use your services, it’s important to understand the consumer. That means who they are, what they do and how long they’re going to be around.
Why to segment your audience
There are 9 billion people on the planet, but not all of them will want to buy your product. By segmenting audiences into smaller groups we focus on those likely to buy our product. Knowing who the audience is lets us choose the right place to market to them, what sort of message will most engage them and how to make our offerings better.
We can also map ‘customer lifecycles’, charting when people are most likely to buy and how long the novelty will last. This lets us plan new product launches in order to extend the lifecycle, as well as giving us a timeline of when to move on to a new group of customers.
There are many different ways to segment audiences. Here are some of the most common:
4 ways to segment
Demographic segmentation is breaking down the general population into manageable chunks based on things such as age, gender, income, religion, race, language etc.
This is the ‘traditional’ way to segment and can be really useful when combined with other methods, but on its own can be a bit limiting. Take Millennials, for example: Millennials are defined by their age. Different generations tend to have different buying habits, but not every 20-something is obsessed with avocado toast. We still see this used a lot, but it’s actually pretty lazy.
Location is an effective way of segmenting for larger companies as cultural differences can be mapped geographically. For multinationals this can be at the country level, but even looking at different regions, counties or cities can create very different audience profiles. Each location typically has different outlooks, different economies and needs brought about by their particular situation. For example, rural consumers are more likely to shop online and probably look for more durable products.
Another way to segment your audience is by behaviour. Behavioural segmentation focuses on how the product is used. Even if a product has only one typical use people may use it in different situations. For example, someone might use a water bottle at the gym, in the car, whilst running etc. Separating the audience by how they use the product lets you cater to their needs and highlight the right part of the product. Whereas runners may be interested in a strap for easy-carry, car users will care more about the straw.
Segmenting by lifestyle is also called psychographic segmentation. This involves looking at how consumers think and feel about everything, not just your product or service. Psychographic segmentation looks at perceptions, beliefs, attitudes, interests, values, emotions and interests. A company such as Lush who prides themselves on vegan-friendly products is not, for example, going to create an ad campaign with the tagline “you can’t make an omelette without breaking a few eggs.” It doesn’t resonate with their audience. Lifestyle segmenting is all about showing that you know your audience and have the same beliefs and values that they do. If you don’t stand for anything and are just looking to grab their money, you’re not going to last very long.
Choosing which method is best for you
What method works for you largely depends on your offering. If you run a small boutique in town, there’s no real need for you segment by location; if you sell something like windows, there’s not really going to be a behavioural change.
As a general rule, demographics can provide fundamental insights for most businesses, so start collecting that data. It is not fool-proof, however. Although you can see trends, demographic segmentation doesn’t offer much depth. You may notice that you don’t engage with a certain community: is that because they aren’t interested, or simply because you aren’t marketing in the spaces they visit?
This is where lifestyle segmentation comes in. It provides an in-depth look at who the audience is, building up a holistic picture. This is great if you have a heavy focus on advertising, use content marketing, or simply want to build brand loyalty. If you have something that could turn into a trend, saying ‘people like you buy this product’ provides your product with an elite or niche status. It might not be for everyone, but for those select few, your brand can become a must-have.
How to go about it
So now you know some of the basic types of segmentation, you’re probably wondering how to go about doing it. Where do you find your information? What techniques can you use to understand the audience? How can you use this to change your marketing message?
Have no fear, we’re going to help with that too! Part two ‘Audience Segmentation Techniques’ shows you how.
Think you’re ready to get started? Give Propeller a call or come and see us in the Media Factory to book in with one of our mentors.