How and why to segment your market – Step 1

In my next two blogs I’m going to look at segmentation. Firstly on the marketing side (which follows on neatly from the last blog (Click here) and secondly a brief look at segmenting your client list.

Marketing Segmentation

Marketing segmentation is simply about communicating with groups of people with similar needs. How you do this is up to you as you will all be operating in different markets, but let’s look at a couple of examples.

Buying a car – What needs does the customer have?

1. The stated need: The customer wants an inexpensive car.
2. The real need: The customer wants a car with low operating costs. The initial price of the car needn’t be low.
3. The unstated need: The customer expects good service from the dealer.
4. The need to feel special: The customer would be delighted to receive a free atlas with the car.
5. The secret need: The customer wants to be seen as a savvy negotiator.

Or toothpaste - this might break down into groups with a need or priority for

• Tooth decay prevention.
• Teeth whitening.
• Desensitising teeth.
• Flavour.
• Appearance/colour/stripes.
• Price.
• Ingredients/natural ingredients

The benefits to you include: 

1. It’s much easier to get and hold the attention of your target audience – New clients? Existing clients? Clients you have lost touch with? Etc. Because your message is particularly relevant to them.
2. You are seen as being an expert in financial planning - again because your message is particularly relevant.
3. Your marketing gets a higher response and so is much more cost effective.

Each segment may, for example:

• Require different products/services.

• Be keen to buy a package of products/services from you – think of cross selling…

• Respond in large numbers to a particular tailor made offering that matches their needs

• Respond best when contacted through particular media Eg Networking events, newsletters, website promotion (Google AdWords etc), blogs, direct marketing, telemarketing, referrals etc

In my next blog I am going to be looking in more detail about your customer segmentation plan.