Marketing is all about getting the right message to the right person at the right time. It sounds simple and exceedingly complicated all at once. Relevance is ultimately everything.
This means that identifying and focusing in on your target market is going to be an essential part of your marketing strategy. You can’t make everyone happy, after all, and if you try, you’ll likely miss out on the type of clients you really want to be working with.
In some cases, you’ll even need to dive deep into your general audience, breaking it apart into different niches so you can truly create messaging that’s right for each individual group and utilizing market segmentation.
In this post, we’re going to take a look at how to use market segmentation to identify different key audience niches and how to know when you should be marketing to each.
What Is Market Segmentation?
Market segmentation is the practice of dividing up your target audience into different categories based on how they’ll interact with you brand. The goal is to use the segmentation to create relevant, highly targeted ad campaigns for each individual group so that you can give each customer what they need to convert at that moment.
Why Is It So Important?
It’s easy to think “my audience is my audience” and leave it at that. But the reality is that even if you had a super-niche product, like a Classic Comic monthly subscription service, you’re likely going to have multiple different niches within that already-niche audience. These groups might include:
- Parents who want to get their young kids some fun action figures, or get them into reading with comics.
- Comic book enthusiasts who are always itching to get their hands on the next big thing.
- People who like comics but use the subscription to skip the hassle of the store, and see it as a fun thing to do every so often.
Each of these different groups has a different relationship with the product. The enthusiasts are going to be checking their mailbox eagerly on the day the subscription arrives; the casual fan will likely be pleasantly surprised to see it arrive.
This s so crucial because it affects the messaging that you’ll use to sell to them. They all have different needs, priorities, and pain points. A strong selling point to the third group would be “hey, skip the hassle, we’ll bring the highlights to you,” but that wouldn’t work on the enthusiast who likes the trip to the store; they’d be more interested in early-release or exclusive content that came alongside the comic books.
Let’s look at another example. Someone who is balking in sticker shock at the price of a car in an ad going to need a very different campaign than someone who is more concerned about it not having enough fancy features. These are two different audience groups who could eventually both become customers, but they’ll need different messaging and ad campaigns to help them get there.
4 Types of Market Segmentation
Market segmentation can take a lot of forms, and you can break down your audience in a number of different ways. The most effective types of segmentation will depend on who you want any given campaign to reach, or (in reverse) what you feel is the best way to effectively create separately targeted campaigns that will appeal to everyone.
Let’s take a look at 4 different types of market segmentation, and when and how you should be using them.
Segmentation by Location
Segmentation by location involves showing certain campaigns to select audience members based on where they live (or, in some cases, have recently visited).
If you have multiple locations or branches of your business, location segmentation is a good choice. It’s also a good option if you only offer certain services to select zip codes.
I constantly see ad campaigns for a food delivery service called GrubHub. They would benefit from more intensive location segmentation, because I always am shown ads for restaurants that aren’t delivered to my zip code.
That’s not a lot of incentive for me to join the service, but theoretically a more relevant ad featuring a restaurant I could actually order from might have won me over.
Note that location segmentation is only advisable when location affects what you can do for your audience, or if you want to create specific offers to appeal to specific regions.
Segmentation by Pain Point and/or Use Case
Different customers will have different pain points that they’re looking for your product or service to solve, or may use your product in different ways. Segmentation based on these key differences can result in hugely successful campaigns.
Let’s say you run a maid service. One of your clients might hire you just to do touch-up work like vacuuming and wiping down countertops once a week. Another might hire you for a deep clean once a month, hoping you’ll help to scrub down baseboards and really get into those cabinets. A third is an apartment complex by a college that hires you to come through and deep clean the apartments once a year when it’s turnover time.
These are three very different clients, but they’re all using your business. And in order to get them on board, you would need to use different messaging to attract them.
Copy for the first client would focus on pain points like “Need a little more time in your day? Get it back by letting us do the dirty work.” The second might use messaging about getting your house spotless or to get it ready for “holiday company” come the winter season. The third might focus on quality-for-budget deals that would attract larger companies.
Here’s another quick example. In the ads below, food service Freshly advertises the product in two different ways. One is focused on the paint point of the difficulty to eat healthily. The other is focused on the pain point of how hard it is to meal prep. Two different pain points that will speak to unique niches in the audience.
Segmentation by pain point or use case is an excellent choice, even if creating targeting to match the campaigns outright can be a little difficult and you need to show the ads to the entire audience.
Segmentation by Demographics
Campaigns targeting Millennials are going to use different messaging than those targeting Baby Boomers, and sometimes there are even big changes in campaigns targeting men vs. those targeting women.
Demographic targeting can be tricky, because it sometimes relies on stereotypes that can be a little inaccurate at best and a little offensive at the worst.
Some of those food delivery ads I keep seeing, for example, are clearly targeted at me because I’m a Millennial, and some seem to outright imply that I must therefore not know how to cook my own food or by confused by how grocery stores work. (Spoiler alert: it doesn’t help to make the potential customer angry.)
That being said, demographic segmentation can be useful. If you’re selling shoes, it makes sense that you’d show campaigns with men’s shoes to men, and women’s shoes to women. While there will be women who want men’s shoes and vice versa, following this segmentation will ensure that your ad is landing in the right place the majority of the time… and that’s a win. Just stay away from potentially offensive stereotypes and you’ll be good.
Segmentation by Funnel Stage
Segmentation by the user’s stage of the digital sales funnel– aka their relationship with your business– is an essential market segmentation option you should not overlook.
Someone who has never heard about your brand will need information about who you are and why they should care; what makes you different enough they should open that email or click on that ad? On the other hand, a repeat customer might only need to see a “50% off sale, starting now!” to immediately purchase without question.
If you’re running ad campaigns, you can use remarketing to create ads based on a customer’s specific relationship with you. With email lists, you can choose to send messages only to users who have taken certain actions, like purchased certain products or not engaged within a set number of days.
The key at this point will be to use what you know about each specific audience niche’s relationship with you to develop campaigns that will be most impactful to them, whether you’re nurturing leads into clients or trying to re-engage customers who haven’t purchased in a year.
Market segmentation is often the best way to ensure that you’re not only creating great ads for your audience overall, but that each niche of your target audience is seeing messaging that’s most relevant to them and their immediate needs.
Since each customer will have different messaging needs to overcome objections, pique interest, and answer questions depending on their pain points, demographics, and where they are in the buying cycle, using the right market segmentation strategies is essential. Consider who your target audience is for each campaign– who can it help and why– and you’ll be able to determine the best segmentation strategy every time.
What do you think? How do you use market segmentation to improve your marketing campaigns? What types of market segmentation have you found most useful? Share your thoughts and knowledge in the comments below!