In the current era of consumer information oversaturation, it’s often difficult to get your message through by using the same cookie-cutter strategy for all audiences. The changing marketing landscape, together with shifting consumer behavior, now speak in favor of more customized messaging. In fact, just in emails, personalized content is said to generate 6 times greater transaction rates.
While this presents great opportunities for entrepreneurs, navigating the nitty-gritty of the chaotic marketing realm can be hard, especially in the early days of your business. But segmentation is one of the blueprints to help you make sense of it. The key lies in recognizing that customers have different needs and triggers and might be in different stages of their buying journey. By classifying your prospects, you can ensure that you target audiences more effectively based on their specific profiles. Not only does this allow for highly personalized campaigns, but it also guarantees that you don’t waste precious marketing dollars by shooting in the dark.
Targeting your audiences specifically guarantees that you approach the right people, in the right channels, and at the right time. By creating addressable segments, you ensure that every single touchpoint that a customer has with your company is relevant and consistent. What can entrepreneurs do to segment and target their audiences in the most effective way without unnecessary pain?
Step 1: Collect data
Data is the currency of our era and the sooner businesses recognize that, the better. It’s crucial that you start collecting information about your customers and prospects as early as possible. Whether it’s email addresses, social media handles, names, or phone numbers, this data holds the key to opening an important communication exchange.
However, the ideal data collection strategy needs to be designed in line with the nature of your business. Different companies cater to different audiences, be it B2B (business-to-business) or B2C (business-to-consumer). For example, if your specialty is in business management software, you might want to know about the target companies and the problems they need to resolve, rather than the income of prospective end-users. Only by collecting accurate and specific data can you build successful segmentation.
To do this, you could either collect information from privacy-protecting forms on your website or utilize lead ads on platforms like Facebook, which are very effective in consumer domains. Additionally, you can access consumer information from third parties. “Data brokers”, such as Acxiom, Nielsen, and Experian, are only some of the multinational giants trading consumer data.
Don’t forget that sometimes just talking to your prospects goes a long way. It’s essential that every new business makes the effort to get to know its potential customers. Collecting the information they share with you will help you get a better image of their needs and allow you to distill more accurate segments. You can record this data through digital notes or in a more structured way, for example by using a CRM (customer relationship management) system.
Gathering as much information as you can — whether through direct conversations or not — will be crucial when searching for patterns across the database. For example, what kind of people open your emails the most? Or what do those who interact with your social media accounts have in common? Has there been any differentiator in the pain points your prospects mentioned? By analyzing these realities, entrepreneurs can outline the defining characteristics and behavior of their potential customers.
In the beginning, your database may be as simple as an Excel spreadsheet; before quantitative scaling, start with a qualitative approach instead. As your customer pool changes over time, you should maintain your data and make sure you are always up-to-date with the needs, personalities, and behaviors of your audience. Try to develop the habit of monitoring new trends in your audience and the overall market to make sure you have a response up your sleeve even before it’s actually required.
Step 2: Select your segments
The truth is that many companies don’t understand what and why to segment. You can simply address these doubts by selecting criteria that are soundly inspired by the balance between the information you have and how much you want to differentiate. For example, if you are a martech startup, you can split up insurance and banking into two separate industries, but perhaps you don’t want to invest time and resources to produce different content for both and instead decide to cluster them as “financial services”.
An ideal segment should be adequately large and measurable. Make sure not to go overboard: Remember that you want to customize your strategy to each, so you don’t need to do it for 15 different groups. Instead, it’s recommended to start with about five. Segments should also be stable, observable, and preferring similar product qualities.
There are different bases of segments, but the most common ones, especially for B2C, include:
- Demographic criteria (age, life cycle, education, occupation, income, family size)
- Geographic criteria (states, regions, countries, cities, neighborhoods, ZIP codes)
- Behavior criteria (product knowledge, usage, attitudes, responses)
- Psychographic criteria (lifestyle, values, interests, opinions, personality)
For B2B, on the other hand, it’s essential to focus mostly on industry or behavioral segmentation. It’s recommended to look at factors such as the size of the company, the number of employees, the location of the company, industry, and the challenges they may face.
Now is when the fun part comes in. Based on the segments, you can go further by creating specific buyer personas. Rather than creating a segment of “decision-makers looking to optimize their marketing processes at low costs”, you can add a playful note to it by defining the group as “CEO Cherry”, who has different trigger points than “Tech Terry”, the IT expert trying to modernize existing company infrastructure. Not only are these segment profiles more memorable, but they also make the hand-off to sales easier, ensuring that the salespeople easily recognize what type of customer they may be dealing with.
Step 3: Think long-term
Making segmentation and targeting a part of your strategy can both improve your marketing results and empower you to do much more. For example, you can focus on a multi-channel approach, and create the ideal mixture of engagement across different channels. This can also help you pursue a more strategic path and be more aligned with established marketing methods, such as the AIDA model (awareness, interest, desire, action). For example, companies tend to use social media targeting to move customers from the interest stage to the desire stage.
But as your business grows, you might need to meet higher demands. And executing grand plans manually may be difficult. In order to reassess your efforts in real-time, keep the data quality high, and avoid errors, you might want to consider a marketing automation tool. Such innovations can improve your sales productivity by 14.5%. In fact, this year, it’s expected that over half of all B2B companies will have marketing automation in place. Let’s face it: Personalization is awesome but you can only do so much with your time. Automation software allows you to easily tailor messages, do automatic follow-ups, easily update databases and create segments, try out A/B testing, and conduct real-time analysis.
On your entrepreneurial journey, it’s highly likely that you will have to wear multiple hats. It may seem like you never have the time to do everything you would like to, but there are certain things you just can’t ignore. In order to be successful, you need to build solid foundations that will help you constantly move forward. Having a solid database is one of these fundamentals. Entrepreneurs should use it to gain a closer understanding of their customers’ needs and to find ways to provide value and the right solutions to potential pain points.
