Market segmentation : A smart move

Marketing to the wrong segment can feel like barking up the wrong tree, or more specifically, barking up tens of thousands of wrong trees ! The introduction of funnel reports has revolutionised the way sales teams approach their conversion rates. However, the misconception that adding more people to the funnel will lead to higher sales numbers and unchanged conversion rates has been a pervasive one in the industry. Based on our initial success rate of 50%, we can predict that marketing to one million people may result in 500,000 sales. However, it's important to note that this is just an estimate and actual results may vary. Market segmentation is the act of dividing your market into identifiable, actionable subsets (segments) that share common characteristics. These might be places of residence, age, lifestyle or even how they behave on your website or app. Individuals within the same segment are assumed to have the same expectations and should react in a similar way to an offer, type of content, or a specific message. Segmentation is often used across the organisation, from marketing to product, to develop more effective business strategies. When done correctly, it allows you to better understand your audience and create a more user-centric experience for your customers. Segmentation is important because it helps you deliver the right value or message, to the right people, at the right time. Traditional mass marketing relies on finding a compromise to satisfy the greatest number of people. Segmentation on the other hand enables you to create more personalised experiences for your customers. This will in turn make your business strategy more effective - whether you’re designing a new product or creating an email campaign as 91% of consumers are more inclined to buy from brands that offer them a personalised experience. Fashion websites excel at utilising segmentation to effectively cater to their audience. By categorising consumers based on demographic factors like gender, these websites are able to create tailored experiences that showcase products and visuals that are highly relevant to each specific group. A segmentation strategy clearly outlines how you hope to segment your market in order to reach your goal. You may choose to segment based on specific demographics in order to target a customer base or segment based on shared values for your targeting efforts. Did you know : While market segmentation tools have advanced significantly, the concept of market segmentation is over 100 years old. Back in the 1920s, it was used by manufacturers who started to produce different vehicle models–each designed to meet the needs of various psychographic and demographic market segments, such as income, interests, lifestyle, and location.