What does Segmentation mean in marketing terminology?


Segmentation is a key part of any successful marketing campaign. It is the process of breaking down a customer base into smaller targeted groups based on factors like location, demographics, online behaviour and other characteristics. This allows companies to create targeted campaigns that are tailored specifically to the needs of certain customer types.

At its most basic, segmentation begins with a comprehensive understanding of your customer base, which can be gained through surveys, interviews and other market research. From there, you can identify common traits and group together customers who share those traits. Generally speaking, segmentation should include four key elements:

1. Demographics: This is probably the best-known type of segmentation, and it works by grouping customers based on variables like gender, age, marital status, occupation and income.

2. Psychographics: Rather than simply looking at tangible factors like age and income, psychographics studies how people think, what they like and how they prefer to shop.

3. Geographics: This type of segmentation looks at customers based on where they live, or what local market or global region they are located in.

4. Behavioural: Behavioural segmentation looks at how customers think about specific products, brands or services, and how they interact with those products, brands or services.

Once you have identified the type of customers you are targeting and their characteristics, you can start creating campaigns aimed specifically at these customer types. This might include more personalised messages, customised campaigns and better advertising techniques.

When it comes to creating your segments, there are a few general guidelines and best practices you should keep in mind:

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1. Know Your Goals: Before you start segmenting, you need to know what you're hoping to accomplish and how that will affect your customers. Be specific about what you want to achieve and how it will benefit your customer base.

2. Focus on the Right Customers: Your customer base may be massive, but that doesn't mean you need to target them all. Instead, focus on the customers who will give you the best return on investment.

3. Analyse Your Data: Once you have an understanding of your customer base, you will need to gather necessary data and analyse it carefully to create meaningful segments.

4. Consider Frequency and Recency: Analyse how often customers buy from you and how long it's been since they last did. This can help you create more effective segments.

5. Understand Your Value Proposition: Your value proposition is a statement of what makes your business unique and why it stands out from the competition. Knowing this will help you create more effective segments.

6. Don't Rely on Assumptions: Segmentation needs to be rooted in reliable data, not assumptions and guesses about what customers might like.

7. Experiment and Test: Try out different segments and campaigns and see what works and what doesn't. Then make changes and adjustments as necessary.

Finally, it's important to remember that segmentation can be a time-consuming process, but if done correctly it can greatly improve the effectiveness of your marketing campaigns. Take the time to create accurate and meaningful segments and it will pay off in the end.