Finding an effective way to divide your audience into groups with similar qualities is an important part of marketing. Providing those groups with relevant content, product information, and an unforgettable brand experience? That’s every marketer’s goal!
As personalization becomes more a requirement than just a preference, it is more important than ever to provide customers with a tailored experience. In an ideal world, each customer or prospect would receive an entirely unique marketing, website and purchasing experience. In theory, this is how account-based marketing works — businesses target key accounts with extremely tailored approaches in order to give them a personalized experience for maximum effect.
ABM, however, can be time-consuming and costly if you were to approach every single customer or prospect in this way. Combining ABM with a segmentation strategy helps businesses get the best of both worlds! With ABM, key accounts that create or have the potential to create the most value are prioritized and receive a unique experience. With segmentation, key groups of customers or prospects are identified, and each group receives a unique experience.
What is the STP model?
STP stands for Segmentation, Targeting and Positioning.
Businesses can use this model to help them pinpoint who their different audiences are, evaluate how important each segment is and why, and finally, develop a way to market to them effectively.
How to implement segmentation, targeting, positioning
The best way to understand how to implement this model is by looking at each section, and then giving an example of how it works in practice. Let’s start by breaking down each stage!
Segmentation is the process of dividing your audience into groups that share similarities. The first step is deciding which segmentation criteria you’re going to use to divide your audience.
For a consumer audience, many businesses choose to segment based on the four main market segmentations, which focus on behavioral segmentation, demographic segmentation, geographic segmentation and psychographic segmentation.
For B2B segmentation, we recommend industry segmentation or behavioral segmentation. There is no one-size-fits-all approach, so it is up to you to decide what works best for your business. Once you have your customer segments, it’s time to define them. What is important to each segment? What similarities does each segment share?
2. How to target your market segments
This is about prioritizing the segments that are most beneficial to your business.
Ask yourself how profitable the segment is? How regularly does this segment use your product or services? Is there potential for upselling and cross-selling? And, most importantly, how easy is it for your business to provide for this sector?
Answering these questions should help you rank your segments in order of importance and help you see where to focus.
3. How to position your business
Now you have worked out your audience segments, and you know which are most important to your business, it’s time for the crucial part. You need to devise a plan or strategy detailing how you are going to ensure your key segments are interested in your business.
Work out why they are, or should be, drawn to your business and focus on that. Ensure they are being fed content, product recommendations and marketing communications that match their interests and highlight the unique selling points of your business.
Examples of STP in use
Now you have some understanding of each stage of the STP model, it’s time to put it into practice with an example.
In this scenario, your business is a commercial cleaning company. Therefore, your clients are all other businesses. Let’s start by breaking the audience up into segments. Essentially, any business that requires a cleaning service could be interested in the company. But you must start by identifying who your key audiences are. In this scenario, let’s say it is factories, large office buildings, small businesses, and commercial venues.
Now we have our segments, it’s time to think about how valuable they are your business and prioritize them. In this case:
- Segment 1: Factories that require a daily, industry-standard, deep clean
- Segment 2: Large office buildings that require a daily, general clean
- Segment 3: Small businesses that require a weekly, general clean
- Segment 4: Venues that require a general clean after commercial events
Now you know which customers to prioritize, you need to decide how you want to position your business. Since segment 1 brings in the most revenue, you need to focus on that.
In this example, that could include a targeted marketing campaign focusing on large factories that may require your services, highlighting your experience with similar clients, cost-effectiveness and quality compared to your competitors. Segment 4, on the other hand, may only be a small part of your marketing strategy. Perhaps a quarterly mailshot, or a flyer to be sent around occasions they may require your services.
How to use B2B STP to improve your CRO
The STP model enables companies to effectively focus their marketing efforts, while providing useful, tailored, personal content to their audiences. It’s a win for both businesses and their potential clients! The more targeted the marketing campaign, the more relevant the content is for the website visitor. The more relevant the content, the more likely the visitor is to engage with your content. This can have a positive effect on your website’s conversion rate!
Users are far more likely to convert when the content they are directed to is what they want to see. In one example from Econsultancy, clothing brand Johnny Cupcakes saw a 123% increase in conversion rate thanks to segmentation. So, it’s clear that by personalizing your approach as much as you can, you’ll be reaping the rewards through conversions and clicks!
The STP model is an effective way to give your customers a personalized service. The more personalized the service, the better!
Website personalization is a great way to provide an all-round personalized experience for your customers and potential customers. The Webeo website personalization software works by tailoring website experiences based on IP address. Combined with a segmentation strategy, this means your prioritized audience will receive a bespoke experience when they arrive on your site — from industry-specific content and product recommendations to a tailored user journey that best suits them. Discover Webeo now.