ultimate guide to Customer Segmentation

Reading Segmentation online can be overwhelming but spend 10 minutes here and we will make you an expert. 

Segmentation Is, At Its Core, Generalization. It’s a way to group your customers so your business can benefit by reaching and converting your ideal customers into a sale.  Customer segmentation is a process of classifying your customer database into small groups with customers having similar requirements. For example, a database can be classified in tags such as age, gender, profession, locality, etc.

Here are some simple examples as a result of segmentation:

• Segment people based on the fact that they bought a specific product
• Segment people based on the fact that they selected “real estate” when filling in your lead generation form
• Segment people based on the fact that they live in Canada (and your marketing automation software can see their location).
• Segment people based on the fact that they haven’t purchased anything or opened a sent email in more than six months.

Using different ways of grouping, or segmentation your customers, allows you to target your customers based on unique characteristics, create more effective marketing campaigns, and find opportunities in your market.

The importance of segmentation is that it makes it easier to focus marketing efforts (money) and resources (and, money) on reaching the most valuable customers and enabling your organization to achieve business goals.

Problem Small Businesses Have – Yet, most businesses, especially without a dedicated marketing department do not segment their customers, let alone have a single system to maintain their customer contact records. 

Customer Segmentation vs. Market Segmentation

Now, you will hear across the internet customer segment

1. Customer Segmentation is the practice of dividing a customer base into groups of individuals that are similar in specific ways relevant to marketing, such as age, gender, interests, or spending habits. For example, the customer segment includes a specific grouping like age, gender, interests, lifestyle, etc.
   
   Question: Do you see your market benefit from any such grouping? Male vs. Female? Or, younger vs. older generation?
2. Market Segmentation is part of the marketing strategy which involves dividing a broad target market into subsets of consumers, businesses, or countries who have or are perceived to have, common needs, interests, and priorities, and then designing and implementing strategies to target them. An example of market segmentation is grouping customers by the products or services they purchase. A company may perform market segmentation based on distinct lines of business such as product sales, professional services, training, or after-sales support.

Question: Do you have different revenue channels? Can you target particular customers for one critical service better than others? Can you be specific to them and benefit them?

Strong Segment Vs Poor Segmentation

Ensuring effective segmentation is your number one goal. After you determine your segments, you want to ensure they’ll be useful. A good segmentation analysis should pass the following tests.

1. Relevant Segmentation – Serving Relevant Segmented Customers. Segments must be structured such that the knowledge effectively attracts your customers and aids your business’ marketing goals. For example, there’s no point in segmenting your technology companies by dress color, as the information is useless to you. Equally, there’s no point in segmenting your hair salons’ customers by the size of their business.
   
2. Uniquely Segmented Customers – Each Of Your Segments Must Be Different And Unique. Segments must be easily distinguished from each other. Your business needs to be able to implement a distinctive marketing mix for each market segment which is only possible if your segments are uniquely independent. Your market segment must produce a differential response when exposed to the market offering. For example: if you have customers who love outdoor activities and people who care about the environment have the same purchasing habits. Rather than have two separate segments, you should consider grouping both together in a single segment.
   
3. Measurable Segmentation – Design Your Segment For Potential Earnings so that your segmentation variables are directly related to purchasing a product. For example, one of your segments may be those who are more likely to shop during a promotion, sale, or seasonal holiday. You should be able to estimate how much your segment will spend on your product or services. 
4. Substantial Segmentation – Be Focused But Have A Significant Collection Of Customers. There’s no point in segmenting so specifically that creating a tailored marketing program for that segment would yield a negative ROI. Your segment should be “the largest possible homogeneous group worth going after.”
5. Accessible And Actionable – The Market Segment Must Have The Ability To Purchase. Your strategy may have identified a large segment, but unless it has the buying power and wants or needs your product, it won’t deliver a return on investment.Each of your market segments should respond better to a distinct marketing mix, rather than a generic offering.  Make sure an identified segment is not just interested in you but can be expected to purchase from you. For example, if you are a high-end retailer, your store visitors may want to purchase your goods but really can’t afford them. Or, your market might include environmental enthusiasts who are willing to pay a premium for eco-friendly products, successful entrepreneurs who want to show off their wealth, and leisurely retirees who can afford your goods. Your firm should have the capabilities to market to each segment on various access channels.
6. Responsive & Stable Segment – Your Segment can be nurtured over time and multiple impressions. Your audience needs to be nurtured a few times before they can be turned into paying customers. Your marketing effort is more likely to succeed than if that segment is stable, rather if the segment composition is continuously changed. More importantly, you are able to measure the response of your Various merchandising techniques used to promote and reach each of these segments.

And, if the segment will not be more responsive to a distinct offering, then the segment can probably be combined with another similar segment. This does not mean that you just shouldn’t change – be flexible. Customers and circumstances change, so don’t let your segments become too entrenched – be prepared to let them evolve.

Now, The Poooooor Segmentation is something that is not incorporating any of the above strategies. If you are just starting with segmentation, then take it slow and steady initially till you learn how to specialize in your niche. Market segmentation doesn’t need to be complicated to be effective. We would advise, though, to get automated from the beginning.

Segmentation Is Great For Business

Let me start with this – Segmentation is critical for mass personalization, at scale. If you wanna grow your business, you need to segment and then personalize. 

Question: Digital transformation is absolutely necessary to scale your business and your CRM is at the heart of the personalization experience. How does your CRM help provide rich insights and help you scale your business?

A Bridge To Your Success

The success of every business depends on its customers and their needs. The customer segmentation process helps businesses to showcase themselves as the best service provider in the market. 

Using different types of market segmentation allows you to target customers based on unique characteristics, create more effective marketing campaigns, and find opportunities in your market.

Improves Customer-Provider Relationship

Segregation of the clients helps the business owners understand current market trends and the expectations of the Customers. This allows businesses to target small groups of clients that share common interests. Companies should avoid targeting a large audience, rather they must start applying Customer segmentation to gain better results by dividing the Customers into various chucks. Today, nearly 55 percent of the companies all over the world apply this process and are gaining huge ROI [Return on Investment]. The working of Customer segmentation offers attention to different groups simultaneously and allows the service providers to work on improving the current services. The companies also come to know about the future market requirements and start working on the next phase/product or the service that is in demand.

Add New Customers Who Look Like Your Existing Ones

While segmentation can help you find new audiences for your products or services, it can also help you reach prospects who look like your best existing customers (who we like to call your whales). Take the Royal Canadian Mint, for example, which mints and distributes Canada’s coins but also creates and sells collectible coins.

In looking for new customers for this side of its business, Mint turned to segmentation. This case study shows how the Royal Canadian Mint took all of its customer data and distilled it down to create a persona that represented their highest-potential clients—those people who had purchased from them in recent years and had the capacity to spend even more.

Armed with that information, they tweaked their entire marketing campaign and created online and print messaging that spoke directly to that high-potential segment. They added 140,000 of these types of customers in a single, targeted campaign.

Reduces Marketing Cost

Another reason why companies should apply Customer segmentation features is to save the marketing cost. The customer segmentation gives service providers an opportunity to communicate with each client personally. For example, one can send a customized deal to a specific group that likes to avail of any particular service from your company. Else, a trader can introduce coupons for a particular segment. The broadcasting of this deal/coupon to a dedicated group will grab the attention of all the clients listed in this group. This action will encourage the clients to avail fair deals at the best market price. This will result in high earnings for the company. This gesture will make the clients’ feel touched and recognized by the service provider in the market.

Drive Impulse Buys

While a great many consumers will write off a business entirely if they don’t send them personalized messages, the benefit to personalization goes beyond simply keeping prospects on the hook or retaining customers. Personalized messages also play a major role in impulse buys. Forty-nine percent of consumers said they bought something on impulse because it was presented to them with a personalized message.

When you convince your customers that you know them better than they know themselves, you eliminate some of the hemming-and-hawing in their purchase decision process. Instead, they’re comfortable jumping right to the sale.

Stay Ahead in Market

Competitors are the biggest threat to any business. Customer segmentation features filter the database and give a clear picture of what the current market trends are and what will be the user requirements in the future. Apart from knowing this, the business owners also get reactions from the users that allow the companies to fix issues in the current system. This is the major advantage of Customer segregation, that it ensures everything is perfect. Apply this feature and get ready to lead the market.  Hence, features like Customer segmentation are an absolute must for businesses.

Tap Into New Markets

Every business would love to reach new markets. But without segmentation, it can be hard to identify those opportunities. However, when you better understand who your existing customers are, you can sniff out gaps in who you’re reaching and fill them using targeted marketing campaigns.

Take this case study on Canon as an example. While the camera company had many customers who used their photography equipment for professional use, they realized there was a big opportunity to grow in the low-end digital camera market. And who did they find to target with those products? Interestingly enough, they turned to children.

While many adult amateur photographers simply rely on their smartphone cameras to capture the moments in their lives, parents are hesitant to buy their kid’s smartphones. Because parents don’t want their little ones texting, calling, and using apps, Canon realized that parents buying low-end digital cameras for their kids represented a great opportunity.

They launched a marketing campaign that played into children’s interest in photography and art and snagged a 40 percent market share in the low-end digital camera market within a year of launching their campaign. Without research into their existing segments, Canon would have struggled to identify this unconventional opportunity to snatch up market share.

Generate Greater Returns on Sales

McKinsey took a look at segmentation in the retail space and found that it garnered benefits when it came to increasing returns on sales. A retailer in Europe who used segmentation techniques saw a three to five percent increase in returns on promoted sales.

How did segmentation help them do that? They took a look at customers’ past behaviors during other promotional periods. By seeing how they reacted across various marketing channels, the business was able to tweak its strategies to set prices based on consumer behavior.

Drive Impulse Buys

While a great many consumers will write off a business entirely if they don’t send them personalized messages, the benefit to personalization goes beyond simply keeping prospects on the hook or retaining customers. Personalized messages also play a major role in impulse buys. Forty-nine percent of consumers said they bought something on impulse because it was presented to them with a personalized message.

When you convince your customers that you know them better than they know themselves, you eliminate some of the hemming-and-hawing in their purchase decision process. Instead, they’re comfortable jumping right to the sale.

Exceed Revenue and Lead Goals

Ultimately, every business’s goal is to hit their revenue targets and (dare to dream!) maybe even exceed them. A great way to set yourself off on the right track to do so is to engage in personalization.

Research from Cintell found that, of the businesses that exceed their lead generation and revenue goals, they’re much more likely to engage in segmentation than their counterparts who reach or fall short of their goals. They’re 2.3 times more likely to research the motivations of their buyers and 1.6 times more likely to understand the fears and challenges their buyers face.

By understanding the inner workings of their customers’ minds, they’re able to build products and services that address customers’ needs and craft marketing messaging that resonates. This all comes together to help them smash revenue goals.

Easy Methodology to Apply Customer Segregation

Now, you must have got a clear idea of what customer segregation is all about. But, one more thing that you need to know is that this feature works in a two-way direction. One is horizontal segmentation and the other is vertical segmentation. In a horizontal manner, the companies focus on one particular field to list the clients. Whereas, in the vertical segmentation, the provider looks for different arrays’ to filter the customers.  

Improve Your Value Proposition

A great value proposition can be a secret weapon for your business. When your value proposition addresses your target customer, proves how you meet their needs, and establishes your superior value over your competition, you create the opportunity to attract even more viable prospects and customers.

And what better way to craft an effective value proposition than by building a deep understanding of the needs of each segment of your customer base? ITSMA finds that 82 percent of B2Bs who developed personas reported an improvement in their value proposition.

If you want to jump-start revenue growth for your organization, you need to start by finding and attracting more customers. And the only way to do that is to understand who your existing customers are and what they love about you. From there, you can create new messaging and products that speak to those needs and will attract new fans.

But very few businesses have just one type of customer. By understanding the different personas you serve and crafting different messaging and products for each subset of your population, you make those customers feel seen and heard—and all the more likely to turn to you for help in solving their problem.

Give Your Email Campaigns a Boost

One area of marketing that can benefit greatly from segmentation is your email campaigns. When you send a generic message to everyone on your list, you miss out on the opportunity to speak directly to the needs of each of your customers.

Segmentation, on the other hand, empowers you to send targeted messages to different subsets of your audience. This, in turn, improves customer response.

A survey from Mailchimp found that segmented campaigns had open rates 14.31 percent higher than non-segmented campaigns. They also saw a 101 percent increase in clicks over non-segmented campaigns, while also noting lower bounce rates, unsubscribes, and incidences of spam reporting.

Ways To Enhance Your Customer Relationship Using Segmentation

Personalized Emails 

Sending a personalized email to a customer makes a customer feel important and he will also be able to have access to the latest offers provided by the company.

Send a “Thank you” Note

Kindness is a way to go. It never fails. Kind words to the customers for choosing our brand over the others help them know that we are grateful. A company is nothing without its customers and letting customers know that- is a great tool to build a quality relationship with them.  

Stand For A Noble Cause

Giving back to society is the ultimate purpose of every human being. An organization obviously provides a direct service to the customers, but if a certain percentage of the profit is given to the less fortunate we all will be able to do our part in making this world a better place to live. By doing so, we not only help the people around us but we will also be able to win the trust of the customers. The customers will feel more than happy to know that a certain percentage of their invested amount in the service will go to the less fortunate. 

Add An Emotional Value To Your Service

It is never just a service or a product, there is always more to it. Customers must be able to connect emotionally as the intent behind the creation of goods and services is to improve their lives. Business organizations must stand strong for certain virtues, it could be truth, loyalty, love, or friendship. Whatever the belief is, a customer must connect to it. You can ensure a loyalty-driven and long-lasting bond by providing an emotional value to the service.

Treat Customers On Personal Occasions

A long-term customer must be treated as a family member. On special occasions like his birthday or his wedding anniversary, a customer must be given an added service for free. For example, sending a birthday cake to a customer’s house, greeting the customer with bouquets on the anniversary of a customer, etc.

Respond To Customer Queries and Feedback

It must be ensured that the needs of customers are taken care of. When a customer wants to ask anything or give any feedback, it must be responded to quickly and with consideration. It will make the customers feel closer to us and we will be able to have them for a longer duration of time.

Keep The Customer Engaged

Consumption of service must not be the end of customer engagement, a customer must be kept engaged. We must develop a relationship with them. Hosting events is a way to keep customers interested. Social media plays a huge role as well. Different types of contests can be held. For example, we can ask customers to post pictures of themselves after or while using our service and describe their experience, in return we can also post them on our official page and give a shout out to them. We have to make it fun and innovative every time. Lucky draws also keep the customers curious and excited.

Conclusion

These aforementioned customer relationship-building strategies are a few of the many ways to enhance the bond between customers and a business. It is mandatory to understand the requirements of your present or potential clients. This is the very foundation of how to build a client base profoundly. In the end, providing quality customer service will do the best work on its own. Client must get value for the money they spend. They must be happy and satisfied. Let us know your views on the impact of rescuing your customer-in-distress in the comments section below. Also, get more updates on resources related to marketing and sales. Join our tribe!

Getting Strategic With Segmentation

Questions That Must Be Answered Before Building A Segmentation Strategy

Why do I need a segmentation strategy in the first place?

The best analogy I can think of is that of a ship. Imagine if the captain yelled “Cast off,” but the crew didn’t know the plan. How would they know which way to steer? How to trim the sails? Or even how to stay out of the way? A strong crew works most effectively when they are well trained, have clear instructions, and know where they are going. If any of those elements are missing, then that’s a recipe for a shipwreck. 

Your company may not need to know how to trim the sails, but they do need a segmentation strategy to turn your business into a success. Market segmentation has become a common practice amongst marketers and businesses who want to understand the behavior of their customers to better position themselves for their services or products. While it sounds easy enough to do, in theory, many companies have had problems when performing their segmentation, you can easily get caught up in the details.

Answering the following questions will help you build a segmentation strategy most suitable for your business.

How Big Is Your Market

“Everyone is going to buy this product!” This overambitious misjudgment is a common fallacy called the Entrepreneur’s bias. This thought process could prove to be a huge mistake for a company. Entrepreneur needs to make sure that they aren’t leading their company with blind optimism.

The most essential step in launching an idea into the market is reasonably and thoughtfully estimating its potential market size. This becomes even more significant in the case of companies that seek third-party financing such as Venture Capital (VC). Most VCs and angel investors would like to know that they are investing in a market with large potential size.

Your market is divided into two categories: 

1. The addressable market is the total revenue opportunity for your product or service.
2. The available market is the part of the addressable market for which you can realistically compete. 

Once you have mastered the difference between these two, you can offer a product strategized to tackle the customer sweet spot.

So how do you determine your market size?

To calculate the market size, you’ll either refer to the data on the number of potential customers or the number of transactions each year.

For example: For a company selling toothbrushes, virtually everyone can be counted as their market. If people are listening to their dentists and purchasing new toothbrushes more frequently, that number is even larger. 

Keep in mind the following points while collecting your data:

• Create projections going out three years.
• Account for organic growth or decline in the following years.
• Your rollout to different geographic locations over time.

Once you have collected the data, you need to determine the Total Addressable Market (TAM).

No startup should expect to gain 100% of the market shares. If you have no idea what a reasonable amount of market share would be, try to find out about the market volume of your local competitors.  Then estimate you’ll be doing a fraction of that after you gain traction.

There are three distinct ways to calculate TAM:

• Top-down, using reports and research.
• Bottoms-up, using early selling efforts data
• Value theory, using conjecture about buyer willingness to pay

The most important aspect is to be realistic about your projections. You need to stay objective and impartial about not just your product or service, but also about Customer needs and wants. Otherwise, you might find yourself doing business in a market too small to stay afloat.

What Industry Trends Are Unfolding In Your Market?

It is necessary to keep up with the latest trends in technology, marketing, sales, and customer services.  All these trends might not affect your business but all major trends do influence the customers’ expectations.  Hence, it is essential to be up to date.

The most significant trends that will impact small businesses in 2021 are given below.

1. Businesses that are green and socially responsible shall be preferred by customers

Ever heard of the term Corporate Social Responsibility? 

Today, many businesses make it their mission not just to do well, but to do good. Corporate social responsibility (CSR) refers to this growing practice of for-profit organizations aligning with relevant causes and social good programs.

Social responsibility, besides making the world a better place, also benefits companies in their recruiting and Customer appeal. The Nielsen Global Survey of Corporate Social Responsibility found that more than half of people surveyed “are willing to pay more for products and services provided by companies that are committed to positive social and environmental impact” and two-thirds would rather work for such a company.

2. Good reviews by customers

Customer reviews are crucial all the time. Prospective customers trust reviews by the existing customers. Hence it helps to gently remind your customers to give reviews. In order to get good customer reviews, make sure you focus on your customer service and address the issues faced by the existing customers.

3. Traditional businesses are learning to profit from e-commerce.

E-commerce business is a strategy to sell products online through web rooms at special prices and discounts. In today’s world, with the wide use of smartphones and laptops,  e-commerce is no longer an option but has become a necessity. 

Traditional businesses are learning to profit from the e-commerce revolution. Online retailers like Amazon help traditional businesses to expand their operations without the need for more physical space.

The investment in an e-commerce business is much less as compared to a traditional offline business. The risk factor is also reduced, promising better profits.

4. Mobile marketing

Marketing of products through mobile will surely grow in the years to come. Businesses can take advantage of the popularity of mobile phones in a number of ways:

• By creating an app for your business. The app will help in sending promotions, offers, latest news to everyone who has the app. 
• Use SMS and email to stay in touch with your customers. With permission from customers, texts with your latest offers can also be sent.
• Online mobile payments platforms such as Google Wallet are appreciated by customers.

5. Sharing stories on social media.

To connect with your audience in a spontaneous and authentic manner, share stories on Facebook and Instagram. Live Streaming on YouTube, Facebook and Instagram is a very powerful tactic for more visibility. 

The good news is that engagement doesn’t have to be a mystery. It can be achieved. You just have to know how to tell your story. When you tell your brand narrative on social media in a way that resonates with the right customers,  they will use your products and services leading to more followers, clicks, tweets, and likes.

What Are The Needs Of Your Market? How Are They Changing?

Marketing strategies target customers who are segmented into groups. For segmentation, surveys play an important role in collecting the information required.

 Segmentation in groups are of the following six types:

1. Geography (Country, City)
2. Demography (Age, Gender, Occupation)
3. Lifestyle (interests, activities, preferences, and opinions)
4. Behavior (attitude, loyalty, usage, knowledge)
5. Benefit (benefit derived by the customers from your products)

Using surveys is the best way to segment the target market. A survey also can help you segment customers based on the attributes they desire from the product.

Read more about how to segment your market here.

Customer needs and interests are constantly changing. Therefore, small businesses must keep up with the type of products and services the customers want. 

For example, A company may introduce a new drink with two flavors: strawberry and blueberry. However, in order to increase market share, they may need to add other flavors that the consumers want. They could also increase the popularity of the product by giving away free samples with their other products that are in demand.

Consumer tastes change with respect to the product features, styles, sizes, dimensions, and services. Conducting market research surveys is a good way to keep track of your customers’ needs and wants.

What Should Be Your Go-to-market Strategy For Each Product/Solution?

When you’re launching a new product, the last thing you want is to waste time and resources bringing it to the market where or when it’s unnecessary. So the first step would be to craft a well-thought-out plan. Without proper planning, it’s impossible to know if you’re chasing the wrong audience, you’re too early or too late to the market, or the market is already too saturated with similar solutions.

What is a go-to-market strategy?

A Go-To-Market (GTM) strategy is the way in which a company brings a product into the market. It includes a business plan outlining the target audience, a marketing plan, and a sales strategy.

How can I create one for my company?

The creation of a successful GMT strategy must include the following:

• Identifying buyer personas and creating a value matrix.
  What are your customers’ specific needs and interests? What is the typical background of your ideal buyer? These questions are answered by creating buyer personas which are basically a representation of your ideal customers based on data and research. Next, a value matrix should be created which provides the purpose of your product and the customer needs that each of its features fulfills.
  

• Defining the marketing strategy
  You need to have a deep understanding of the market, your competitors, and the customers. While defining a market strategy for your business, make sure you answer the following questions:

1. What is my target audience?
2. Why does my product matter to them?
3. Who is my biggest competition?
4. What is my USP?
5. What resources give me an edge over my competition?
6. How can I use these resources to optimize the outcome?

• Understanding the buyers’ journey
  It is very important for you to understand how a buyer goes from step 1 i.e. “Do I really need this?”, to actually buy your product. You need to convince the buyer that they need the product and that you are the best source of that product.
• Selecting a sales strategy
  This step consists of creating a plan that will introduce the product or service to the market. Some elements to include in the sales strategy include:

1. Training support: How to train the sales team so they have enough knowledge to confidently sell the product or service.
2. Tools and resources: This includes anything needed by the sales team to identify, engage with and sell to customers as well as manage these relationships and demonstrate the product or service.
3. Client acquisition: Identify the best approach for finding customers.

How Do Your Competitors Go To Market?

It is often said that a marketer’s job is never done. This is especially true when it comes to keeping track of your competitors. This usually becomes costly for a small business in terms of time as well as money. Given below are a few places you can start: 

Set Up Alerts

Get updates on your competitors’ activity via Google Alerts. All you have to do is type their domain and select the activities you want to be notified of. These activities could be blogs, videos, posts, images or discussions. Pay attention to their titles and meta descriptions and the tone they use.

Follow them on social media

Follow your competitors as well as the key leaders on social media to get a sense of what they are doing. 

For example: As a restaurant owner, you may want to follow the names of restaurants you compete with as well as the chefs and restaurateurs to get a full picture of their activity.

Sign up for their newsletters and emails

A good way to receive emails from competitors is by signing up for a free trial or making a small purchase. This gives you the perspective of a customer and also helps you keep track of what you’re up against. Take note of the language they use, their tone, and also the offers and discounts they provide. This will help you strategize a plan for your company accordingly.

Assess their SEO performance

Analyzing your competitor’s SEO will help you understand how they draw people to their site through informative, relevant content.

You can emulate their approach by targeting many of the same keywords that they target. You should also fill in the gaps by covering territory where they’re weak or have no presence. Identifying those areas will be a key part of your competitor analysis. Here’s what to look for:

1. Their most useful organic content i.e. what gets them the most clicks.
2. Their existing rankings i.e. the areas they have a strong presence in?
3. Their past rankings i.e. their growth, decline, and other important changes.
4. Their backlink profile i.e pages that link to them and help them rank.

Track their ads

Use sites like WhatRunsWhere and Adbeat to see the display ads your competitors are running on other websites.

 Take note of your competitor’s most trusted keywords. Your competitor might experiment with other terms, but you can easily see where they invest their time and money. Make sure you review the ad copy that they run with their top keywords. It reveals their most dominant messaging. This will help you understand their strategy better.

Check their website regularly

Explore their website to find out what they’re doing right and what they may be doing wrong. This also keeps you up to date with all their product launches, their offers and discounts, special promotions, and positioning.

Another important note to make is their hiring section. You can find out valuable information about the company and its areas of growth by looking at the positions they need to fill.

SWOT Analysis

SWOT Analysis is a technique used to identify the strengths, weaknesses, opportunities, and threats of your company.

Why should I conduct a SWOT analysis for a small business?

If you’re a marketer or small-business owner, you might be wondering if SWOT analyses are practical or even feasible for your business. There is definitely a resource overhead involved in the creation of a SWOT analysis, but there are many benefits in doing so, even for the smallest of companies. Conducting a SWOT analysis allows you to identify what your company is good at, where it could improve, the opportunities for your business, and the threats you need to deal with. 

What Are Your Competitive Strengths And Weaknesses?

It is comparatively easier to determine your company’s strengths and weaknesses as compared to the opportunities and threats. This is because the former are internal factors while the latter are external factors that require more effort and rely more on statistical data.

In order to determine your strengths as an organization, you could begin with the following questions:

• What do your customers love about your products?
• What does your company do better than your competitors?
• What are your best brand attributes?
• What’s your unique selling proposition (USP)?
• What resources give you an edge over your competitors?

Answer these questions and identify the strengths of your company.

We can use the same principle to determine your company’s weaknesses:

• What do your customers dislike about your products?
• What problems or complaints are repetitive?
• Why do your customers cancel or churn?
• What could your company do better?
• What brand attributes require improvement?
• What are the biggest obstacles/challenges in your current sales funnel?
• What resources do your competitors have that you do not?

What Are Your Opportunities And Threats In The Market?

In order to identify opportunities and threats, you may be required to conduct an in-depth analysis of what your competitors are up to. You also need to examine the wider economic or business trends that could have an impact on your company. Some possible questions you could ask to identify potential opportunities might include:

• How can we improve our sales or customer service or customer onboarding processes?
• What kind of messaging best suits our customers?
• How can we improve on engaging our most vocal brand advocates?
• Are the departmental resources allocated effectively?
• Is there a budget, tools, or other resources that we’re not leveraging to full capacity?
• Which of the advertising channels exceeded our expectations and why?

For identifying the threats to your company you can begin by asking the questions above. However, it’s often quite easy to come up with a list of potential threats facing your business or project without posing questions beforehand. This could include “branded” threats such as emerging or established competitors, broader threats such as changing regulatory environments and market volatility, or even internal threats such as high staff turnover that could threaten or derail current growth.

You may also notice that the quality standards or specifications of your product are changing and you need to reflect those changes in your product if you want to stay in the lead. Evolving technology is a constant threat. But it is also an opportunity!

11 Tricks to Identify Targets by Consumer Segmentation

A successful business owner never relies on one specific way to earn profit. Rather, he/she keeps looking for a different option to continue the business growth. And, marketing to the target audience plays a crucial role in this process. There are several ways to promote business, but one strategy that makes a difference to the entire scenario is consumer segmentation. Before moving to today’s topic, let me give a quick definition of consumer segmentation. 

This is a feature that segregates the entire database into a field-specific list. Now, one must have an understanding of the fields that offers can prove beneficial in their business growth.

Given below is the list of ways to identify the target audience.

Demographic Segmentation

This type of segmentation focuses on various dimensions of the client’s profile. That is gender, age, locality, occasions. One must take a glance at what is the current market trend and then what percentage of the market have they captured? So, this will give you an idea of what exactly you need to do. For example, if you deal in the business of flowers and cakes, then you must use demographic segmentation to filter the clients according to their order preferences, location, age group, and gender. These four fields would help you get an idea of what is in demand and how to fulfill it. Another important reason to implement this strategy is to make a huge profit by emphasizing fulfilling a particular demand. In short, fulfill the market demand and earn profit at large.

Behavioral Segmentation

Change in human behavior is a general tendency. But, in business one has to ensure that the client’s behavior won’t change. As it can cause huge damage to the business. Now, understand the exact description of behavioral segmentation. This is a process that allows the service provider to act according to the consumer activities on the website. The businessman must pay attention to the following components of this strategy.

Firstly, keep a track of engaging customers, means making a list of the customers that give regular feedback or leave comments on almost every post/product or service. This will give you an insight into the flaws and expectations that a customer has from your company. As a result, you will start working on fixing bugs and developing future requirements.

Secondly, communicate with the users who discard orders after adding a product or a service to the cart. The best way to grow your relationship with these types of clients is to send them emails with deals and discount coupons to get them back on board. An instant reply to these types of consumers, makes them feel valued and hence they revisit the site. This improves benefits in different ways.

Thirdly, don’t forget to greet your clients on occasions. Then, be it a new year or their anniversary. Keep a monthly list of customers having an anniversary or birthday. Design a template for this particular conversation and send it accordingly. For example, write a Happy Birthday message or a message greeting on New Year.  This personalized type of communication grabs a client’s attention and attracts it to your website.

Getting Started With Segmentation

Your ultimate goal with constructing segmentation is to develop an appropriate marketing mix offering. Starting to build segmentation should follow some deep thinking and analysis. The process will help you split your market into smaller groups with similar product needs or identifiable characteristics for the purpose of selecting appropriate target markets. 

There are five primary steps to create your segmentation strategy:

Define Your Target Market

The first step in creating market segments is to clearly define the market of interest. It is important not to define a market too broadly, and define them in sub-markets. Questions: Is there a need for your products and services? Is the market large or small? Where does your brand sit in the current marketplace?

Create Your Market Segments

Understand your market & evaluate the proposed market segments for viability. Start looking for market segment opportunities. A market segment opportunity is a trend that can drive new marketing tactics or offerings. To find them, first, ask questions about your brand. 

You do this by conducting preliminary research surveys, focus groups, polls, etc. Ask questions that relate to the segments you have chosen, and use a combination of quantitative (tickable/selectable boxes) and qualitative (open-ended for open text responses) questions.

Decide which of the five criteria (demographic/firmographic, psychographic, geographic, or behavior) you want to use to segment your market. Choose two or three of these variables from your market research. 

You don’t need to stick to just one – in fact, most brands use a combination – so experiment with each one and find what works best.

Assess Your Customer Segments

With your responses from your research to highlight which customer segments are most relevant to your brand.  While constructing your strategy, make sure you evaluate your segments to be strong and not weak. Strong segments result in far greater ROIs. Here is the table of the summary that gives your glimpse into

Evaluate And Test Your Market Segments

The selection of a target market is a very important decision for any business as it requires effort and commitment to implement an appropriate and targeted marketing mix. 

Target market selection is a key part of marketing strategy and typically involves significant analysis, discussion, and review throughout the firm. 

Once you have interpreted your responses, test your findings on your target market, using conversion tracking to see how effective it is. And keep testing. If uptake is disappointing, relook at your segments or your research methods.

A Few Stats to Justify Small Business Lead Segmentation:

Mailchimp did an assessment of their client’s email campaigns and determined the following:

When marketers segment their email lists (based on interest, signup date, and a few other characteristics)…

• Email open rates were 10.82% higher than non-segmented campaigns
• Email click-through rates was 94.27% higher than non-segmented campaigns
• Reports of abuse were 3.70% lower than non-segmented campaigns
• Email unsubscribes were 9.36% lower than non-segmented campaigns

A few more segmentation statistics:

• Segmented and targeted emails generate 58% of all email-driven revenue. (DMA)
• 77% of email ROI comes from segmented, targeted, and triggered campaigns. (DMA)
• Marketers noted a 760% increase in revenue from segmented campaigns vs non-segmented ones. (Campaign Monitor)
• When the Open Golf Championship utilized segmentation and personalization within their email campaign to determine the recipient’s location, they were able to personalize a map to their location:

The campaign resulted in an online traffic increase of 250% and over 500 leads. (EmailonAcid).