Market segmentation is part of any successful sales strategy. Not only will it increase your bottom line profits (significantly) it will be easier to market your products to this specific segment. Whilst this isn't a new, or shiny strategy, it's often overlooked because it seems too simple to work… Let me reassure you once you start using segmentation as part of your sales strategy, you won't want to do it any other way!
First, let’s talk about what market segmentation is, and then we’ll go over the different ways it can improve your sales strategy.
What Is Market Segmentation?
Many small business owners make the mistake of thinking their product serves absolutely everyone. Only air and water actually have the “everyone” market cornered. Not even food is needed by everyone… Entrepreneurs want to get as many customers as possible in order to grow their business fast. This means they start chasing anyone and everyone with a pulse in the hope they become a customer.
Unfortunately for them, they waste their marketing budget on things that are almost impossible to achieve (not totally impossible right? Because air and water have managed it, and Wi-Fi isn't far behind 😉 ). Even a large corporation with many stores (such as Tesco) uses market segmentation to create all their marketing programs because going after a narrower audience works better. Market segmentation is going after a smaller portion of your audience, even the “audience of one”.
What Are Different Types of Segmentation?
There are many types of segmentation and more than what will be listed here; more than I have time to type about. You can segment your audience in many ways ( Sarah segments the readers of this site before they even get onto an email list), then market to each individual segment with different, yet specific, marketing campaigns.
Ensure Your Market Segment Is Identifiable
You should be able to describe the market segment in mind-blowingly, intricate details. The more information you have about the market segment, the better. What are their desires? How much money do they make? How much money can they spend? What type of thing makes them want to buy? Why do they want to buy it? What happens when they buy the product? How do they feel about it? What are their fears and pain points? How do they feel about those? Are they hurt enough to want to take action?
Ask Whether You Can Reach That Audience
I'm often asked about reaching high net-worth individuals. Often by people who have no idea what the life of a high net-worth individual is like. Until they stop thinking of this audience as just rich, they will have problems. Money doesn't stop your husband cheating, your kids talking back to you, and the fridge being empty all of the time. When you understand this, you can understand your audience better and then reach them.
What method of communication can you can use to get to the market segment you’ve chosen?
Do they use
- mobile phones?
- Facebook Messenger?
How will you get your message to them? What will it say? Can you evoke enough curiosity so they reach out to you?
Know If Your Audience Is Large Enough
In each industry, there is a certain conversion rate you’ll want to aim for. But, you need to know if the market segment you’ve chosen to focus on has large enough numbers to make your financial goals a reality. No sales strategy will work if there aren’t enough people to buy on a regular basis.
Business growth is directly impacted by the number of buyers in your market segment.
Understand the Unique Needs of the Market Segment
The more you can understand the needs and desires of each segment, the more you’ll succeed in your marketing efforts. For example, are you trying to market to professionals who have MBAs? If so, what is unique about the MBAs holder you wish to target?
You Can Also Segment by Obvious Sectors
Geographic, demographics, moral attitudes, and values are all good segments to start with when you set up your marketing campaigns. If you can match your values to the largest demographic in these cases, you can create a winning campaign.
Once you determine the segment you want to target, you need ways to get to them. A good way to do that is to create a lead magnet to give away to the sector that you want to target in your sales strategy. You can create the lead magnet yourself or you can hire someone to do it for you.
A good lead magnet should not be something you have to create fresh for each new potential customer, but instead a very targeted piece that you only create once for your chosen market segment, and then delivered inexpensively.