Luxury goods manufacturer Montblanc worked with Yieldify to present a selection of offers across their website. Here we might look at customers and define them by their:. Compared to demographic segmentation, this can be a harder set to identify.
Good research is vital and, when done well, psychographic segmentation can allow for incredibly effective marketing that consumers will feel speaks to them on a much more personal level.
By comparison, geographic segmentation is often one of the easiest to identify, grouping customers with regards to their physical location. This can be defined in any number of ways:. In large nations like the United States, customers could be presented with options that match with local weather patterns. Geographical identification is an important part of seasonal segmentation , which allows businesses to market season-appropriate products to customers.
Some recent examples of proper geographic segmentation came from the response by e-commerce businesses to the coronavirus pandemic. During lockdown stages, many businesses shifted their focus to local communities to highlight how their services could still be accessed online. Conversely, as public spaces began to open up again purely e-commerce brands had to shift their marketing plans to maintain the levels of business they had seen over the lockdown period.
Behavioral segmentation is possibly the most useful of all for e-commerce businesses. As with psychographic segmentation, it requires a little data to be truly effective — but much of this can be gathered via your website itself. Here we group customers with regards to their:. At Yieldify, we utilize behavioral segmentation to deliver highly relevant and targeted campaigns based on a number of behavioral patterns:. Based on this behavioral data, we can tailor our messaging accordingly:.
First time visitor: Hey, learn about our latest collection! Returning visitor: Join our loyalty program and start saving! Working with online wine club Vinomofo , we used behavioral segmentation to target three distinct audiences: new visitors, returning visitors, and returning clients.
Returning visitors who had already subscribed but have not redeemed their coupon yet were reminded on their first order incentive. This targeted approach focused on purchasing habits reached a Though the most common types of market segmentation are demographic, psychographic, geographic, and behavioral, there are other types that are also worth considering and can offer excellent opportunities in the right context.
Technographic segmentation identifies and groups customers with regards to the role technology plays in their lives. With segmentation and targeting, you want to understand how your market will respond in a given situation, like purchasing your products. In many cases, a predictive model may be incorporated into the study so that you can group individuals within identified segments based on specific answers to survey questions.
Demographic segmentation sorts a market by elements such as age, education, income, family size, race, gender, occupation, and nationality. Demographic is one of the simplest and most commonly used forms of segmentation because the products and services we buy, how we use those products, and how much we are willing to spend on them is most often based on demographic factors. Geographic segmentation can be a subset of demographic segmentation, although it can also be a type of segmentation in its own right.
It creates different target customer groups based on geographical boundaries. Because potential customers have needs, preferences, and interests that differ according to their geographies, understanding the climates and geographic regions of customer groups can help determine where to sell and advertise, as well as where to expand your business.
Firmographic Segmentation is similar to demographic segmentation, except that demographics look at individuals while firmographics look at organisations.
Firmographic segmentation would consider things like company size, number of employees and would illustrate how addressing a small business would differ from addressing an enterprise corporation. Behavioural Segmentation divides markets by behaviours and decision-making patterns such as purchase, consumption, lifestyle, and usage. For instance, younger buyers may tend to purchase bottled body wash, while older consumer groups may lean towards soap bars. Segmenting markets based on purchase behaviours enables marketers to develop a more targeted approach because you can focus on what you know they, and are therefore more likely to buy.
Psychographic segmentation considers the psychological aspects of consumer behaviour by dividing markets according to lifestyle, personality traits, values, opinions, and interests of consumers. Large markets like the fitness market use psychographic segmentation when they sort their customers into categories of people who care about healthy living and exercise.
Find out how to drive product design and profits with customer segmentation. Why should market segmentation be considered a strategy? A strategy is a considered plan that takes you from point A to point B in an effective and useful way. Market segmentation is similar, as there will be times you need to revisit your market segments, such as:.
If your customers change, then your market segmentation should as well, so you can understand clearly what your new customers need and want from you. For example, natural disasters caused by global warming may impact whether a family chooses to stay living in an area prone to more of these events. On a larger scale, if your target customer segment moves away from one of your sales regions, you may want to consider re-focussing your sales activities in more populated areas.
For example, Winter has several holidays, with Christmas being a huge influence on families. Knowing this information can help you predict and prepare for this period. For more information on how Qualtrics helps brands master market segmentation from start to finish, check out our Segmentation Research Service. Where can you use market segmentation in your business? When your business wants to enter into a new market or look for growth opportunities, market segmentation can help you understand the sales potential.
It can assist in breaking down your research, by aligning your findings to your target audience groups. If you have your entire market separated into different customer segments, then you have defined them by set criteria, like demographics, needs, priorities, common interests, or behaviour preferences.
When you know a lot about your customers, you can understand where your business is connecting well with them and where there can be improvements. You draw in ideal prospects and are more likely to convert potential customers into buyers. Being more specific about your value propositions and messaging also allows you to stand out from competitors. Instead of blending in with other brands, you can differentiate your brand by focusing on specific customer needs and characteristics.
This distinct value and messaging leads to stronger bonds between brands and customers and creates lasting brand affinity. Niche marketing is the process of identifying segments of industries and verticals that have a large audience that can be served in new ways. When you segment your target market, you can find underserved niche markets that you can develop new products and services for. Targeting in marketing keeps your messaging and marketing objectives on track.
It helps you identify new marketing opportunities and avoid distractions that will lead you away from your target market. Within each of these types of market segmentation, multiple sub-categories further classify audiences and customers. Demographic segmentation is one of the most popular and commonly used types of market segmentation. It refers to statistical data about a group of people. Where the above examples are helpful for segmenting B2C audiences, a business might use the following to classify a B2B audience:.
Because demographic information is statistical and factual, it is usually relatively easy to uncover using various sites for market research. A simple example of B2C demographic segmentation could be a vehicle manufacturer that sells a luxury car brand ex. This company would likely target an audience that has a higher income.
Another B2B example might be a brand that sells an enterprise marketing platform. This brand would likely target marketing managers at larger companies ex. Psychographic segmentation categorizes audiences and customers by factors that relate to their personalities and characteristics. Psychographic segmentation factors are slightly more difficult to identify than demographics because they are subjective. They are not data-focused and require research to uncover and understand.
For example, the luxury car brand may choose to focus on customers who value quality and status. While the B2B enterprise marketing platform may target marketing managers who are motivated to increase productivity and show value to their executive team. Related: 4 types of market research to fuel your marketing strategies.
A brand that tries to appeal to everyone in their marketing will come off as generic and unmemorable. It could also leave customers confused about what the brand stands for and what kind of company it represents. As your company grows, you can expand your offerings, but when first starting out, it can be challenging to differentiate your company if your product offerings are too broad.
Market segmentation can also help to inform other important business decisions regarding how you get your product to customers. These decisions may involve matters such as pricing and distribution. Businesses can use segmentation to help them decide on pricing that maximizes sales while keeping customers happy. Companies may consider demographic information such as income levels.
Paying attention to seasonal demand changes can help businesses time special deals to boost sales. Market segmentation can also help companies to determine the optimal strategies for the distribution of their products. Some groups of people, for instance, are more likely to shop online, while others are more likely to shop in a store. Companies can also decide which stores to pitch their products to based on where their market segment shops. Their customers may, for example, shop at luxury boutiques or bargain outlets.
Looking at geographic data can also help a company decide where to set up a new store. To take control of your segmented audience data, you need the right data tools, along with the right partners.
Working with Lotame provides you with both. We offer tools such as our data management platform , which you can use to collect, organize, analyze and activate all of the data you gather.
Organizing your data in our DMP helps you get a better understanding of your audience. You can easily create audience segments using our DMP. We also provide a variety of other tools such as our data exchange , which gives you access to thousands of third-party audience segments, and our cross-device technology, which enables you to serve sequential messaging to users across multiple devices.
As the leading independent DMP provider, we are highly agile and responsive to our clients. We can help you improve your understanding of your audience to enable enhanced content personalization and ad targeting. To learn more about our solutions and how we can help you get to know your audience better, contact us today. Find new customers, increase customer engagement, and grow revenue with first-, second-, and third-party data.
Target users based on behaviors they've displayed off-site or to reach users on other properties. When it comes to data, understanding the differences between data providers and the segmentation they…. Market-leading location platform integrated with Lotame DMP delivers additional targeting depth and contextual mobile campaigns….
Privacy Center Careers Request a Demo. What Is Market Segmentation? Types of Market Segmentation 5 Benefits of Market Segmentation The Importance of Market Segmentation Market segmentation can help you to define and better understand your target audiences and ideal customers. Types of Market Segmentation There are many different kinds of market segments you can create. Actions taken on a website: You can track actions users take on your online properties to better understand how they interact with them.
You might look at how long someone stays on your site, whether they read articles all the way to the end, the types of content they click on and more. Benefits sought: This refers to the need a customer is trying to meet by purchasing a product. Usage rate: You can categorize users based on usage rate. Your messaging will be different depending on whether someone is a heavy user, medium user, light user or non-user of your product. Loyalty: After using a product for some time, customers often develop brand loyalty.
You can categorize customers based on how loyal they are to your brand and tailor your messaging accordingly.
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