Imagine your company is about to launch a brand new, innovative, and exciting product. You can have the best product in the world but if you are not catching the attention of the people that will want to buy it, then it is a bit like shooting in the dark.
The problem is that customers are not all cut from the same cloth and each and every single one has varying needs, expectations, and requirements. Of course, you can never hope to please everyone, but by segmenting your clients into different markets, you can hope to target your offerings and services to what each segment is looking for.
Market segmentation is the process of dividing your target audience or audiences into further subgroups, according to their specific needs. By approaching them in this way you can better understand your customers and you can create highly specific marketing campaigns which result in a much better conversion rate.
But how does market segmentation help your business spend and make money efficiently? Read on to find out more!
It helps you to improve your product and services
Who, what, and why are the questions that you need to be asking yourself when it comes to market segmentation. Having a crystal clear idea of what your customers want will help you really position your company as the best solution for their requirements. This, in turn, will make your clients happier, increase your performance against your competitors, and will stop you wasting money on product or service offerings that are not meeting what your customers want.
Attain quality revenue
If you end up investing in the wrong segment, it can cost you and your company dearly. You don’t just want customers that will buy once and then seek out better deals elsewhere, you want customers that will return again and again as well as increasing their spend over time. By knowing who your customers are and targeting them appropriately, you will acquire quality customers that are ready to invest in your services in the long run, not just as a one-off.
Increase your sales
Utilising market segmentation methods will help you to increase your sales, therefore what you spend on the segmentation process will find it’s way back to you, plus some extra profit. By segmenting your client base in a suitable way, yes you may lose a customer or two (remember, you cannot keep everyone happy) but the customers you retain will become more valuable to you and overall your sales should increase.
Focus on your marketing message
Segmenting your clients and getting to know them better will significantly help your marketing department in knowing how to talk to them. With the new information you will gain, you can easily create a customised and more focussed marketing message that will result in higher interest in your product.
You will stop wasting money
By utilising market segmentation, you will stop throwing away money on marketing campaigns and processes that just don’t work. Instead, you can channel your budget into creating meaningful messages whilst targeting exactly the people that you think will be interested in what you have to say.