The days of mass-market selling are long gone. Customer segmentation analysis is a critical step in your brand strategy to ensure your business attracts an audience that is aligned to your offer and will ultimately convert to sales.
It’s essential to ensure your business is maximising the opportunities that present themselves through marketing investments, and consistently tailoring your brand to align with the changing needs of your customers.
Customer segmentation is the practice of grouping different sets of like people (customers or potential customers) based on distinct needs and/or characteristics. Various customer segments are defined using demographic information like age, race, or location, or psychographic and behavioural information like interests, opinions, values, lifestyle, risk aversion, or life stage. Analysing each customer segment will assist in the early stages of brand development. Which group represents the greatest opportunity? How can you better understand this group to tailor your brand strategy to resonate with them?
It is important to identify the various segments of the market to then develop personas. Buyer personas bring to life a detailed fictional representation of the various customer segments that make up your target audience. A persona is a fictional character created to bring to life the character of your target audience. A detailed persona provides all levels of the organisation with a clear view of the wants, needs, goals and problems faced by that client. In most cases, these personas are created by using a mix of real data gathered through research along with hypothetical scenarios. Personas are then used to make decisions that will motivate your target market to purchase your product or service.
Together, customer segmentation and buyer personas can provide a very comprehensive and accurate guide as to how to best position and market your brand. Firstly, segments can help forecast the market interest and help you with your brand positioning to attract the customer segments you’ve identified as suitable. Once you’ve identified the segments, developing buyer personas will ensure your marketing message addresses the needs, motivations and pain points that will help you convert sales and increase the profitability of your brand.
Segmentation analysis and persona development will assist in achieving profitability not only by accurately identifying who to target but also where and how to reach this audience, and what to say to convince them to convert to your brand.
At BrandMatters, we used segmentation studies to help some of our clients better engage with their prospective and existing customers. Segmentation can be effective for both B2C and B2B clients. We use a mix of quantitative and qualitative techniques in the process.
Starting with qualitative brand research will give your brand some direction as to what differentiates the segments. The qualitative research will explore consumer needs, attitudes and behaviours that may reveal some motivations and barriers of each segment towards your brand.
Once you have some variables that have emerged via the qualitative research it is time for quantitative research to take place. Quantitative research allows faster answers gathered via surveys that will allow you to identify the distinct segments based on the assumptions and direction from the qualitative research.
This brand research approach using a combination of qualitative and quantitative methods is the best way to identify relevant variables and execute a thorough segmentation study.
To make the segmentation insights actionable:
The aim of the segmentation game is to find your brand’s sweet spot. You can’t satisfy everyone, all the time; attempting to do that will almost always lead to failure.
To learn more about segmentation research and conditions needed to translate its insights into action contact BrandMatters.