Don’t try to satisfy everyone. You will only encounter failure. Segment your market if you want to increase your chances of success.
No matter how hard you try, you cannot satisfy all the needs and wants of all consumers. This is simply impossible to do. The best thing that you can possibly do is divide the market into manageable segments and choose the best segment you would like to market your products to.
The Benefits of Segmenting Your Market
Most companies segment the market based on several factors including demographics (age, gender, income and family life cycle), geographical area, and consumer behavior (i.e. benefit derived from the product or service, when is a product purchased, and usage rate). By dividing the market into groups, you can focus your marketing efforts on customers who are most likely to buy your products and services. In addition, segmenting your market also allows you to:
- Identify the least profitable markets so you can avoid them;
- Build brand loyalty and enhance customer retention by offering products and services your customers need and want;
- Provide great user experience and enhanced customer service;
- Keep costs down and increase your profit potential by enhancing the efficiency of your marketing campaigns.
Segmenting Your Market: How Should You Do It?
To enjoy great results, you need to identify the right customers for your business. Here are some tips that you can use as a guide to help you accomplish this goal.
- Don’t rely on averages. If you want to segment your market more accurately, you need to know how your customers consume your products. Relying on average spend alone may not produce accurate results.
- Look for homogeneity. Do not lump people who use your products and services into one group just because they happen to be on the top 20% who buy 80% of your products. Take a closer look since there may be things that make them entirely different from each other. Failure to do this can lessen the impact and effectiveness of your communication strategy and cut into your profits.
- Don’t get lost in the details. Some business owners tend to overanalyze the buying behavior of their customers and create more sub-segments than necessary. Don’t commit the same mistake. Do not obsess over segmenting your market to great detail, especially if it doesn’t make enough economic sense.
- Keep your eye on the target. Don’t try to be everything for everyone. Focus on customer segments that bring the most profits.
- Make periodic reviews. Review your segments at least once a year to make sure they remain current, and that your value propositions are still relevant to the market.
Defining your target market allows you to implement a more effective campaign and help you take your business to the next level of success. Do it now and enjoy great results.