How to Sell More to Less People: Essentials of Segmentation

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Businesses often make the mistake of trying to sell to everyone. Are you guilty of this?

Why is this a mistake? Well, if you try to please everyone you end up delighting no-one. This is why best-in-class marketers work with best-practice segmentations. And targeting the biggest group is not often the best strategy. In fact it rarely is. Read on to find out why.

Your brand needs to appeal to a group of customers who are looking for the solution you are offering. This means that you need to make a choice of who to target amongst all category users. Making a choice implies that you will have to ignore some category users who you could perhaps attract. This seems counter-intuitive and makes many marketers scared. Does it scare you not to try and go after everyone?

It certainly worries many marketers and yet it’s the only way to sell more. Although this may not sound like common sense at first, segmentation actually ensures that you have the best possible chance to satisfy the needs of your targeted customers. Once you are satisfied with your results, you can always go after secondary target groups.

But let’s start at the beginning with the essentials of segmentation.

 

Where to start

When deciding who to target, most companies conduct some sort of analysis. This can be as simple as identifying your users by what you observe, such as young men, older housewives, or mothers of large families. And although these are easy to articulate, you are working with demographics, something every other brand can do as well. It also has the weakness of not truly understanding why your customers are choosing your brand  – or not – over competition.

It therefore makes much more sense, to move on to a more sophisticated segmentation, just as soon as you can. Why? Because it is far more powerful. For example, rather than appealing to “young men”, targeting “those who value freedom and are looking for brands that can provide or suggest this dream” will immediately provide a clearer image of the group. Even if the majority of the segment are young men, the description is far more actionable. Do you see why?

Providing a detailed description of your target customers will always have the advantage of making engaging them that mush easier, because you will be speaking “their language.”

 

Types of segmentation

I mentioned above that you can simply use demographics to segment all category users. But I also alluded to the fact that it is not very distinctive, nor competitive. The sooner you can run a more complex segmentation the better.

The first thing to know about the essentials of segmentation is that there are five main types: 

Segmentation for success

Firmagraphics: This is the most basic and is usually how the industry separates the different types of products and services. Continue Reading

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How to Segment for Actionability & Success

Last week I shared the twelve questions you need to be able to answer in order to ensure you really know your target audience. If you missed it, you can read it here.

The post certainly attracted a lot of hits, so I hope you have all found ways to improve your own customer understanding as a result of reading it. Comments welcome as always.

All brands and services need a group of customers that they are going to satisfy, since it is impossible to appeal to everyone most of the time. This means that you will need to make a choice about who you are going to target, which also implies that you must accept that you will also ignore some other category users.

Last week I read a really great post by Colin Nelson of HYPE on how a simple segmentation of employees enabled Swisslog to understand and improve participation in their innovation ideas campaigns. I highly recommend reading this case study as it shows how even the simplest grouping of a market – in this case employees – can be both actionable and successful.

Segmentation can be as simple or as complex as you like, but is essential for all successful businesses. If you yourself are struggling to understand your consumers, employees, retail customers, or any other group of people, perhaps a segmentation exercise is what you need to run.

 

 Where to start

When deciding who to target, most companies will start by conducting some sort of data gathering. This could be as simple as identifying your users by what you observe, such as young men or large families, or as complex as gathering your customers’ values and motivations. As mentioned in last week’s post, the deeper the understanding of your target customer is, the more likely it is to provide you with a competitive advantage. The same also goes for segmentation.

Choosing the right group of customers to satisfy with your product or service is essential for business success. So is doing everything you can to understand them as deeply as possible. Truly customer centric organisations excel at doing both; do you? Why not share your own success story on segmentation?


Need help in understanding and segmenting your current category customers or defining which group to target?

Let us help; contact us here.


 

This post has been adapted from one that was published on C3Centricity in May 2012.

C³Centricity uses images from  Dreamstime.com  and  Kozzi.com

 

 

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