As marketers, we throw a lot of words around. Buzzwords and jargon can make it tough for others to know what we’re talking about! And sometimes, we get so used to a word, we don’t realize that we don’t quite understand what it means. Businesses talk a lot about markets. Before we delve into segmentation and target market, let’s go back to basics.
A market, by definition, is a group of people that want something. A service, a product — whatever it may be. When there is a ‘market’ for something, it means there are people willing to buy it. Within a market, there are usually tons of market providers. Some of which will be most successful — we refer to these as market leaders. Think Apple and Nike. These brands are trailblazers in their respective industries.
To be successful, brands need to understand their own market. To do so, they need to break it down into smaller groups and identify what each one wants. Then, they need to decide which is most valuable to their business.
What is a target market?
The market for a product is usually vast. Marketers need to divide it into groups that share similarities. Dynamic Yield states that 96% of marketing execs believe in the value of personalization. Segmenting consumer markets will make things more personal! There are lots of ways to segment a market. Behavioral segmentation, demographic segmentation, psychographic segmentation, and geographic segmentation are most popular. If you’re looking for b2b market segmentation, you can also split by industry. Learn more about the different types of market segmentation here, and which one is best for b2bs here. Once you have defined your groups — or segments — you need to decide which one you’re going to focus on. This is your target market.
Marketers will usually base this on how much revenue they drive. Or, how well they fit with wider business goals. Your marketing strategy will then focus on this group, making it a priority for your sales team too.
- Targeting smaller, engaged audience is cost effective.
- It makes personalization easier.
- Personalization improves CRO and ROI.
- It helps give a greater insight into customer wants and needs.
- Improving customer loyalty is imperative to success.
How does it fit in with segmentation: target market segment strategy
Without segmentation, marketers would have no way of understanding their customers. The marketplace is full of customers with a variety of wants and needs. Lots of people need phones and active wear. Their reasons for buying will be very different. An app-loving teenager will have different requirements from an internet-dependent business owner. An occasional-gym goer will have different needs to a personal trainer. It is up to marketers to ensure customers’ needs are being met. And, it’s worthwhile going the extra mile to create a personal experience. According to Instapage, personalized homepage promotions influence 85% of consumers to buy!
Start by segmenting your audience — there is no right or wrong way to do this! Every business is different, so decide which approach works best for you. Once complete, you’ll have several smaller audiences that make up your wider audience. Each of these segments will have something in common. Their buyer behavior, their age, their values; it all depends on how you decide to split them.
One of these segments will stand out to you. This could be because of quantity of purchases, revenue, loyalty, or even how easy it is to market to them. This becomes your target audience.
Why is market segmentation important?
Market segmentation is imperative to personalization. With so many products available, customers expecting and demand a bespoke service. It is no longer about hoping customers will like your products. Instead, we must tailor products and communications to meet an already engaged audience.
- Segmentation enables marketing and sales teams to rank customers by importance.
- It helps you decide where to focus your efforts, and where not to!
- It enhances opportunities to expand locations, products or services.
- Increasing the ability to up-sell and cross-sell drives revenue.
- It is a necessary step towards a personalized marketing approach.
Market segmentation, target market and ABM
The next step up from targeting market segments is account-based marketing (ABM). This is where marketing and sales teams align to reach common goals. ABM works by targeting individual accounts with a bespoke marketing approach. Each key account will receive tailored communications and relevant content. In business to business marketing, ABM works wonders. According to ITSMA, 85% of marketers said ABM outperformed other marketing investments. And, 87% of b2b marketers agreed that it delivers a higher ROI.
Start by making the most of the data you already have. Identify companies that are like your existing customers; these will become your key accounts. Research these companies and collect as much information as you can and get to know the brand. Qualify leads as much as possible. Then, use the information you’ve gained to create content that relates to each account. The next step is to use the data you’ve collected to get that content in the hands of the right person in the company. Now, a key decision maker will have access to content created by you, that meets their needs. In turn, your brand is at the forefront of their mind and the start of their buyer journey.
- Account based marketing drives more revenue.
- It improves customer retention.
- Use ABM to align sales and marketing teams.
- It saves your business time.
- Building relationships with customers is the key to success.
So, as marketers, our end goal should always be a personalized approach. Market segmentation is a powerful and accessible way to find your target market. Then, it is up to you to provide a first-class marketing approach to turn your audience into a dedicated fan base.
Website personalization is the future of personalized marketing. In the next few years, we’ll all be laughing at how static and generic websites are right now. Marketing drives traffic — but if visitors aren’t immediately engaged, you’ll lose the sale. Instapage found that 74% of customers feel frustrated when website content isn’t personalized. Perfecting an end to end personalized marketing strategy takes time, money and resources. So, don’t let your website give visitors any reason to leave your site!
Webeo works by creating bespoke web experiences based on visitors’ IP addresses. It can welcome users with personal greetings and present relevant content on arrival. It can tailor the layout, images and language used based on the visitor. Get to know the power of personalization and request a demonstration today!