With tools like Facebook, MySpace, YouTube and other social networking platforms, segmentation has become the most valuable and lucrative industry in the world – all with good reason. Collating information on a market segment that is valuable to marketers and alike – is priceless!
A segment is a part of the market consisting of a group of customers or prospects which is homogeneous to itself, has a similar need and which can be addressed in the same way, using the same strategy and distribution channel.
It is also very much about identifying which product or service a customer or prospect is likely to buy and exactly how best to communicate with them.
Many companies still treat all customers and prospects the same.
Know how big your segments are, what the size of the market is and ascertain what opportunities exist for your company in each channel.
Importantly, put your resources where it is most needed.
“The realism is that getting information to segment in depth is a challenge,” said Marketing Eye, CEO, Mellissah Smith.
“The difference between b2b and b2c is very complex.”
4 Steps to segmentation
1. Clean data: Data must be clean, current and comprehensive in a universal format. Create one master file by merging information from different areas to enable you to assess the state of the market and create a cusotmer-centric view.
2. Identify variables: Segments can be compiled by using a multitude of factors like geographic location, purchasing behaviour, business size, type etc.
3. Divide and Analyse: Determine what each company needs and divide it into segments of businesses with similar profiles then enlist a data specialist to conduct a statistical analysis. This will help identify trends and determine important charactistics of each segment.
4. Apply: Match the segments against your business objectives and use the segmentation as an ongoing part of your marketing strategy ensuring you have the market intelligence to fine tune your database and turn customer information into your competitive advantage.
ROI is very important when it comes to delivering direct marketing campaigns and market segmentation will not only help you deliver a more targeted campaign to your audience, but also work in your favour to achieve sales outcomes and a higher return on investment for your marketing dollar