I can often be heard saying that nobody starts a business because they think that actually running a business will be fun. Everyone I have ever met who has started a business has done so because they had a passion that they wanted to share (and ultimately monetize). Running a business is the hardest part, as I’m sure we can all agree.
So much of what we do at Anchor Watch Marketing is helping small businesses understand and message to their target audience. We believe that understanding your ideal customers on a deeper level allows you to develop a brand and marketing strategy tailored to the psychological workings of the people you’re trying to reach.
But there’s never just ONE ideal client, for any business. In fact, I recommend to most businesses that I work with that they develop at least four ideal client profiles. If you think every person you’re selling to watches the same ads, needs the same problems solved, is working with a similar budget, or values the same thing - you’re likely missing a large number of potential clients because you’re limiting who you're messaging to.
So how does a small business develop a marketing strategy without pigeonholing who they’re speaking to or presenting a one-size-fits-all marketing strategy? The answer is always CUSTOMER SEGMENTATION.
What is Customer Segmentation?
Segmentation is the process of dividing your target customers into smaller, more defined groups based on shared characteristics, such as demographics, behaviors, or interests. By segmenting your target audience, you can tailor your marketing efforts and messaging to better resonate with each segment, and ideally develop a stronger brand that results in higher conversions and more sales.
How to Segment Your Customers
First thing’s first: there is no right or wrong way to segment your customers. It’s important to assess your business and your goals and consider which segmentation methods make sense for YOU. This can mean segmenting based on their challenges, their age range, or even how much money you are likely to make from them.
A few ways you can segment your target customers:
Demographic segmentation - age, gender, income, education, occupation, or family size.
Behavioral segmentation - actions, behaviors, purchasing habits
Psychographic segmentation - lifestyle, values, personality, and interests
Lifestage segmentation - where they’re at in their lives (having kids, going off to college, retiring, saving, etc)
Benefit segmentation - understanding the benefits your customers are looking for from your products or services
Value segmentation - transactional worth; how much they’re likely to pay
Benefits of Segmentation for Small Businesses
None of us likes the idea of more work, and the thought of sitting down and spending time with your customer avatars in this much detail may feel like a daunting task. However, spending the time to do this upfront can quickly improve the output of your marketing efforts.
Here are just some of the way that segmenting your customers can help your business:
Allows you to tailor your message to get the most ROI for your marketing efforts
Increased brand loyalty and retention through personalized communications that speak to the needs of your audience
Boost sales by targeting your highest value customers first
Build brand trust through refined and consistent messaging
Informs business decisions and opportunities for growth and/or expansion
Provides a roadmap for campaigns
Makes your marketing efforts significantly more effective and efficient, saving you time and money
Conclusion
Ultimately, customer segmentation is a great way to tailor your marketing and messaging in order to reach the potential customers you are truly trying to reach, exactly where they are. Doing so helps improve return on investment by ensuring you are not wasting efforts on saying the wrong thing to the wrong people.
If you're ready to take your marketing strategies to the next level through customer segmentation, schedule a free consult with Anchor Watch Marketing today.
Comments