All brands want to connect with the audience with several promotions and informational messages almost daily. However, all marketing messages must reach the right audience with relevant information.
If you spread the message widely, only a few users will read it and become your customers but it will also reach many users who are not interested in your product. This is where market segmentation comes in. It helps engage those users who can be easily converted.
“Don’t find customers for your product. Find products for your customers” – SETH GODIN
In this blog, you will learn about market segmentation and its benefits and importance.
What is Market Segmentation?
Market segmentation is filtering out the complete master data and creating buckets of users who showed the same behavior while engaging on the website and the application.
Market segmentation means dividing users into small groups to understand them better and create effective marketing strategies. It helps you engage with more users and drive conversions.
The success of any business depends on how, when, and which customer brands are reaching according to gender, income, and interests. If you want a target-oriented audience, then segmentation is the answer. On the whole, the benefits of market segmentation are magnificent.
Types of Market Segmentation
Explore the types of market segmentation that I have mentioned below;-
Demographic Segmentation
It is a simple but effective kind of segmentation. Demographic segmentation is used primarily by D2C e-commerce brands.
You can break the audience and create buyer personas based on information like age, gender, income, qualification, religion, etc.
Geographic Segmentation
It is a process of dividing users based on where they live and what they shop for. Users who live in the same state, city, or pincode mostly have the same wants, ways of thinking, and societal preferences. All market segmentation methods help you analyze the data to understand how each factor affects the user’s buying pattern.
Psychographic Segmentation
Psychographic segmentation is dividing users based on the same personal values, political beliefs, desires, and psychological features. For example, personality, hobbies, social status, opinions, lifestyle, values, and beliefs. As these features are subjective, the psychographic segment is tough but also the most important.
Behavioral Segmentation
It is important to identify users’s behavior based on their interests and actions and create customized personal communication. However, when dealing with a large user base, it’s difficult to do this at an individual level.
Behavioral segmentation helps you arrange the users based on their spending and purchasing habits, browsing habits, brand interaction, reviews, testimonials from customers, and more.
Benefits of Market Segmentation
Explore these benefits of market segmentation to learn more about this;-
Increase Brand Awareness
Market segmentation generates various opportunities for the audience to build a strong connection with the brand. Users will be attracted to direct, personal marketing strategies that uplift completeness and a sense of relationship. Market segmentation also boosts the ability of brands to choose loyal customers and increase brand awareness.
Great Customer Experience
Every user buys the product for a reason, and showing them that you care leads to a better customer experience. Customer feedback tells how well the brand interacted with customers at every stage of their buying journey and delivers them delightful experience.
As per the study, 80% of customers say experience matters, like products and services. Market segmentation is the best tool to target users with personalized and relevant information.
Successful Campaign
With the help of segmentation, marketers invest time and effort in a particular segment, which drives the opportunity to convert users into potential buyers. Overall, this approach leads to successful campaigns with an increased return on investment.
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Powerful Message
While we have the option to connect with the target audience according to their taste and preferences and send a strong marketing message, we can create relevant and personalized messages that acknowledge the requirements of the segmented audience.
The impact of market segmentation with strong messaging attracts users to take the required action and become customers.
Resource Balancing
Rather than focusing on the huge databases, we can moderately utilize the resources with market segmentation. The correct approach and the right use of time, money, and workforce for a segmented audience cost less than comprehensive marketing.
Less Unsubscriber Rate
According to the study, segmented campaigns enjoy 9.37% lower unsubscribe rates than normal campaigns. Depending on the business, you can define attributes, create a segment, and analyze them based on behavior, preferences, and growth.
Importance of Market Segmentation
Market Opportunities
Market segmentation helps businesses find opportunities that reflect when there is a gap between customer expectations and available products.
Product Development
Market segmentation helps in designing products that match the demands of the audience. This can be achieved through customer reviews, feedback, and their opinions about the product. It’s about understanding exceptional customer needs and bringing changes and development to the product.
Promotional Mix
A brand can make the appropriate promotion mix decision depending on the nature of the product, the customer’s expectations, and the competitor’s strategy.
Pricing of the Product
Market segmentation creates an opportunity for every brand to decide product prices based on user’s ability and willingness to buy particular goods and services.
Conclusion:
Here we covered all the points that can help you to understand, How market segmentation is important for your business. From enhancing market campaign strategy to achieving business goals, it helps you in every step.
So what are you waiting for, start your research today and get to know your audience better.
Also Read- What is the Customer Engagement Score?
Ritika Khanna is a senior product solution expert at EnRcloud and a part of the marketing consultancy and growth team. Helping brands to address their Engagement and Retention problem statement using New Age and AI Powered Marketing Automation Platforms. Apart from this, I am adaptive to any work environment and also a good team player.
