Your customers are not all the same, nor are they all different in every detail. While you might struggle to develop messaging that appeals to everyone, you can develop messages and product offerings that appeal to specific groups of people.
To sell successfully, you must be able to offer benefits that solve specific problems, and you should target them toward people who share similar aspirations, wants, and needs. Customer segmentation means determining who your ideal customers are and grouping them according to the criteria that dictate their purchasing behaviour.
Once you have done that, you can develop sales strategies that recognise people who fit into each segment and offer them solutions that will interest them. Sometimes, the same product can be bought for several different reasons. Targeting market segments based on why customers buy will be more effective than trying to please everyone at once.
Customer Segmentation Examples
Example 1
You are selling photo editing software. Your customers include:
- Businesses that want to present their products in a way that appeals to customers
- Influencers and hopefuls who want glamorous pictures and a large following on social media
- Individuals who want to have great pictures that preserve their happy memories
Your sales and marketing messages would differ for each of these segments. Businesses want professional-looking product pictures. Influencers want attention-grabbing content. Individuals want happy memories captured beautifully to enjoy across years and generations.
Example 2
A fashion house designs clothing for people of all ages, shapes, and sizes. Trying to appeal to everyone may mean they appeal to no one. Instead, they segment their market.
- Parents looking for cute kids’ clothes
- Teenagers hoping to follow the latest trends
- Young professionals who want to impress friends and colleagues
- People who want stylish and flattering clothes to suit their body shape
- Older people seeking an elegant and timeless look that reflects their personality
Each of these customer segments can be further divided according to gender identity, and then five segments turn into at least ten. Not sure you can cater to all of them? Pick the segments that generate the most sales and focus on them.
Example 3
Your company sells fine wine and hopes to boost sales through targeted sales and marketing. Your customers may include:
- Collectors and investors on the lookout for something rare and valuable
- Ordinary folks who love entertaining and want to offer their friends good wine
- Foodies who love to pair good wines with food for an amazing experience
Each of these groups wants different things. Collectors and investors want an asset that appreciates in value. Entertainers want something their guests will love. Foodies want memorable food and wine pairings.
Customer Segmentation vs Market Segmentation
Market segments represent people you may yet sell to, as well as people you have sold to already. Customer segmentation refers to people who have bought from you already. Since they have bought from you once, they are more likely to buy again. This makes customers a high-value area to invest some effort into.
Both market and customer segmentation are important. However, customer segmentation and strategising for each customer segment is more likely to bear fruit than general market segmentation approaches. In addition, you have historical data that allows you to see how different customer segments behave. The wider market is less predictable.
Benefits of Segmenting Your Customer Base
Segmenting your customer base has multiple benefits, and you won’t be the only one who appreciates the results—your customers will, too. By using customer segmentation for targeted marketing, you may achieve outcomes like these and more.
For your customers:
- Greater customer loyalty: “They always know what I want!”
- Better customer satisfaction: “I love all the products they offer me.”
- Better customer retention: “I will keep supporting them. They understand me.”
For your business:
- Better ROI: “Our sales and marketing strategies are successful.”
- Better product development: “We know what this niche needs, and we can help.”
- Greater competitiveness: “Our competitors don’t understand customers like we do.”
Types of Customer Segmentation
The ways you choose to segment your customers depends on what affects their buying behaviour. Examples of customer segmentation include:
- Demographic segmentation: Age, race, gender, marital status, income, education, geographical location
- Behavioral segmentation: Reasons to use your product, things they’ve done before, shopping behavior
- Mindset and personality segmentation: What they care about, are interested in, think, and feel is important
- Value perception segmentation: Buying lowest-priced items, highest-priced items, or in search of special offers
- Segmentation according to needs: Grouping customers according to the problems they face and the desires they have
- Business type and size: For B2B sales – industry and size of enterprise
- Customer lifecycle segmentation: new customers, long-standing customers, and departing or dormant customers
How to Target Market Segments More Effectively
Firstly, decide which segments you will prioritise. It makes sense to target market segments with the biggest spend first. These are the receptive market segments that are most likely to present good sales opportunities now. You already know some of the things that may matter to them, and this can guide your approach.
Segments representing your mid-range spenders are next on your list. But don’t forget to contact customers who seem to be nearing the end of their lifecycle. They might just need a reminder that you are out there and still ready to serve them.
You may find that people and businesses that fall into specific customer segments share similar purchase histories, but you should not treat them all alike. Consider how they fit into other customer segments. For example, women with a certain value perception may react differently to a specific type of messaging than men with a similar value perception do. A single customer may match several segmentation rules at once. Tailor your messaging accordingly.
Know your customers and take everything you know about them into consideration when pitching a sales message. This may require a little flexibility, but it will pay off. No script will work for everybody in a market segment, and you will need empathy to gauge what works for each customer.
The Human Element is Irreplaceable
In marketing, the best you can hope for is to appeal to people who match a market segment you’ve identified. You will still need empathy to craft a message, and the results you get depend on the way people in targeted segments respond.
In sales, there are opportunities for give and take: a process in which you adapt your messaging based on real-time client responses. You may begin with segment-specific approaches, but if your customer does not respond positively, you can work to find out why and adapt accordingly.
The adaptability that one-on-one conversations allow should boost your results per person contacted. This is a distinct advantage of in-person sales, even though it targets individuals rather than groups. Time and resource constraints are the biggest problems most companies face in adopting this approach, but we have a solution.
RSVP’s outbound sales service teams could be just what you need to reach out to people in your chosen market segments. We are communications experts with all the tools you need to stay in touch and in charge. Our history of serving leading brands speaks for itself. We’d love to serve your customers next. Let’s talk about the customer segments you’d most like to reach. Allow us to amaze you (and your customers) with what we can do.