A Guide to Customer Segmentation and Its Benefits

A target audience consists of individuals who are the most likely to need the goods and/or services offered by a business. When it comes to online marketing, successfully identifying your target audience ensures your marketing efforts are directed towards the right people, which helps boost conversions and ensures your marketing budget is being used correctly.

Of course, identifying your target audience is just the first step. You must also break down that audience into segments using characteristics like behavior, age, gender, income, and other essential factors. This guide explains why customer segmentation is so important, and what benefits it offers when performed effectively.

How to Segment Your Customers into Separate Groups

Creating a segmentation strategy is the first step to online success. In this case, you should consider your overall marketing goal, whether that’s increasing conversion rates, getting more people to join your social media pages, or enticing users to sign up for an online newsletter. Once you know what you’d like to achieve with your online marketing approach, the next step is to review your target audience.

In order to segment your audience correctly, you must be a pro at sourcing data from your customers. There are a few ways that you can do this, such as by sending out surveys to customers to collect information. You can also review website analytics to gain more information about user behaviors. In general, there are five data categories that can be beneficial from a marketing perspective:

  • Customer Behavior – Behavioral data establishes a picture of a person’s buying behaviors as they interact with your website. This data can include information on previous purchases, as well as times when a customer has abandoned a shopping cart or failed to take the desired action.
  • Demographics – Demographics data includes general social characteristics, such as location, age, gender, income, education, and many other factors.
  • Psychographics – Unlike demographics, psychographics focuses on a user’s personality and values. For instance, a customer’s desire to only spend money on sustainable products would be a very valuable data point for a business.
  • Multiple Conditions – It’s possible to combine different data categories to get a fuller picture. For example, you may combine demographics and customer behavior to really drill down into what your audience wants.
  • Campaign Responses – Campaign responses evaluate how your customers interact with you and your business. For instance, opting for push notifications from a mobile app is a type of campaign response. You can also review how customers choose to sign up to membership programs, whether that’s from your website or mobile application.

Benefits Offered by Customer Segmentation

Tailoring marketing to the specific needs of an audience segment can greatly enhance the effectiveness of campaigns, which will also improve your return on investment. Having a better understanding of your target audience also allows you to communicate with them more effectively. In addition to boosting sales figures, better communication goes a long way to fortifying customer loyalty towards your business.

Customer segmentation can even give you an advantage over your direct competitors. In the event there are changes to the needs or preferences of your customers, you will know what needs to be done to adjust your marketing approach accordingly. When competitors aren’t taking the same steps, you’ll naturally come out on top.

For decades, SonicSEO.com has helped our clients identify target audiences and take the necessary steps to meet their needs. We insist on using market research to help you make decisions regarding your business’s marketing, as well as assisting with brand development to make the biggest impact on potential customers. If you’d like to discuss audience segmentation with our team, feel free to contact us today!