Market Segmentation: The Art of Finding Opportunity

Market segmentation has become so rampant, especially in the online retail sector, that most businesses don’t even think twice about whether to use it or how to go about it. So many companies rely on segmentation to target their communications—whether through email, online ads, targeted social media posts or traditional mail—in an attempt to provide customers with the information they want and need.

For many companies, these segments look essentially the same. Customers are targeted by the same type of basic demographic information no matter what products the company is selling or what services they’re offering.

But with the marketing segmentation tools available today, there is no need to follow the same path as your competitors—or any other businesses—when creating your market segments. Market segmentation is all about finding opportunities to reach and expand your audience in ways that are unique to your business. So before you start targeting ads by gender and marital status, start thinking about other ways you can segment.

Market Segmentation the Old-Fashioned Way

Traditional market segmentation is all about basic demographic information. Gender, location, marital status, family size, and of course, previous purchases. Though this information can be helpful in some instances, it barely scratches the surface of what’s possible with market segmentation, and it ignores the fact that your customers’ lives and interests revolve around so much more than what their gender is. People are much deeper and more interesting than that!

Find Opportunities to Create Useful Market Segments

Of course, there is no one right way to create market segments—and that’s a great thing! There is so much information available that allows you to cater segments to your specific business. Are you marketing for a performance venue? Stop relying on an old-fashioned market segmentation model that tells you rock shows should be marketed to men and ballets to women. You have much more sophisticated information at your fingertips now, so you don’t need to rely on stereotypes. Try social media marketing based on the bands, movies, and entertainers people are interacting with on their accounts. Instead of trying to sell clothing by age information, target ads based on the brands people are following on social media. These methods are simple but nuanced, and they create opportunities for much more detailed market segments.

Use Market Segmentation to Identify Opportunities

Sometimes it works the other way around, too. Sometimes, as you create market segments, you will notice sub-segments within each segment, or you will find that certain segments share certain habits that you didn’t expect. When analyzing your market segmentation information, don’t just check to see if each segment is buying what you thought they’d buy, or behaving as you hoped they would; comb through to see if they’re showing other consistent interests. This might open the door to new segmentation opportunities.

Don’t Be Afraid of Change

The best part about abandoning traditional segmentation in favor of a more unique and personalized model is that it favors what works, rather than what has always been done. This means that, if you have tried to segment your audience in a certain way and it doesn’t seem to be yielding the results you want, or any results at all, you don’t have to stick with it. Market segmentation is all about creating and identifying opportunity, so you’re free to abandon anything that has no use to you and start again with something that works better for your business. It’s all about trial and error.

Evaluate Your Success

When it comes to market segmentation, its important to regularly evaluate your success. The first step is to determine what success looks like to you: maybe it’s a certain percentage of pickup on an email offer. Maybe it’s the reach of an ad. Success will look different to each business, so really think about what’s important to you.

Once you’ve defined what success is to your business, find ways to measure that at regular intervals. Continue with practices that work and adjust ones that don’t.

Market segmentation (http://www.ehow.com/info_7743039_importance-market-segmentation.html) is more than just targeting emails based on demographics. It’s all about digging deep into the information that’s available to you and turning it into opportunities for your business and for your customers.

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