What is a Market Segmentation & Why is it Important?
Market segmentation is the process of researching and sorting an audience into groups based on common traits in the hopes that they will react similarly to marketing initiatives. This allows organizations to better understand and more effectively target consumers.
Harris Brand Platform’s market intelligence software makes this easy by providing real-time customer insights and numerous filtering options.
Customer profiling and segmentation helps companies more effectively market and advertise to their customer base.
Market segmentation allows you to tailor communication to the customer. One-size-fits-all marketing efforts are less successful than those that speak to the individual. The more work you put into connecting with each of your customers, the more likely you are to succeed.
The importance of profiling and market segmentation cannot be overstated. These efforts lead to improved performance, higher engagement and conversion rates, increased customer retention, and more upsell opportunities.
Types of Market Segments
While there are many segmentation strategies, we describe the four most common below. Harris Brand Platform is uniquely designed to implement these strategies using brand intelligence data.
One of the most common types of segmentation strategies, demographic segmentation, creates market segments focused on individual attributes, like age, education, and income.
Geographic segmentation targets the physical locations of individuals and businesses to better speak to their needs. This allows brands to create location-specific messaging.
Psychographic segmentation focuses on values, opinions, lifestyles, and personality traits. These attributes can give insight into an audience’s motives, preferences, and needs.
This segmentation strategy allows B2B and B2C companies to divide their audience based on actionable behaviors, such as purchase decisions and usage rates.
Market Segmentation Strategy
To develop a market segmentation strategy, start by identifying segments that are quantifiable, measurable, and actionable. You want groups that will maintain buying power and continuously interact with your services.
Harris Brand Platform makes it easy to identify segments and track how your brand fares with each of them. Our brand tracker streamlines the process of market segmentation, saving you time and resources.
Marketing Segmentation Mistakes to Avoid
As you develop a strategy, be aware of the most common segmentation mistakes to avoid wasting time and money. Some of the most common missteps include creating segments that are too small, segments that fail to evolve as audiences change, and only focusing on segments instead of ROI.
When utilized effectively, market segmentation is highly beneficial. Although this strategy requires research, planning, and careful implementation, the return on investment can be huge. Harris Brand Platform’s brand strength metrics make it easier than ever to measure. Don’t wait to start enjoying the advantages of market segmentation!