Finding Your Target Market Through Segmentation
There’s no doubt that a little bit of customization can go a long way in the eyes of a customer. Using a blanketed market strategy and crossing your fingers that it will appeal to all of the individuals out there is a risky way to go. But fortunately, there is a better way. It’s called market segmentation. Market segmentation allows you to identify your target market (think most profitable one), tailor your message to them so you can build a strong relationship, and increase the return of your marketing efforts. Not only that, but it gives you a competitive boost because you have better knowledge on the specific needs and wants of your customers. A study from Harvard Business School showed that in the U.S. 85% of 30,000 new product launches failed due to poor market segmentation. Don’t be part of that statistic.
Here are a few strategies and tips to help you navigate your way through market segmentation.
- Start simple. Demographics provide a clear-cut way to divide a large market. Some good examples are: age and/or generation, gender, occupation, income, and marital status. For example, your target audience may be a 40-55 year old male that is a contractor at a small business.
- Psychographics. These can be a trickier to measure, but can be extremely effective factors when it comes to segmenting. Grouping based on psychographics means clustering consumers with similar lifestyles, values, personalities, and ethics. Your target market may be a person that values reliability, durability, or price.
- Behavioral. This could include product usage rates, brand loyalty, or buyer history. Looking through past sales, consider customers that may have bought or rented the same brand of equipment, like Bobcat. You can segment your customers on criteria like this that reflects their brand loyalty.
- Geographic. Segment your market based on the area that your customers are located in. For example, if you are a small equipment dealer in North Carolina, you may want to look into the different cities and/or states that your customers coming from, and try to segment your marketing efforts and content to those areas.
- Industry type or company size. You can do this if most of your customers are contractors versus customers buying equipment for personal use. If your buyers are mainly contracting companies, try segmenting based on the size of those companies. For example, if the company is larger and buys in bulk, you may want to consider advertising a high-volume discount to them.
Don’t forget that these are just some segmentation suggestions to help you get started. It’s best to do the research to determine unique segments that will be most beneficial to your business. Make sure that your segments are not too broad, or other narrower-focused competitors could have a larger opening to a particular market. Once you define your segments or target market, starting planning your messaging and campaign that will be most effective in reaching them. .
What are some markets that your business targets? How did you determine them? We would love to know in the comments section below!
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