To business owners, entrepreneurs and internet marketers..
Are you segmenting your market in your business? If you aren’t, you may be leaving profits on the table..
As you should know, marketing your business in this new age, be it a big corporation or a small to medium enterprise, is a great challenge. Everyone has a method to marketing that they believe will work for them, but in this current age, no one knows for sure if it will work until they try it.
Personally for myself, segmenting my customers is one such marketing technique that I believe is very important to any business.
The traditional methods of Mass Marketing is truly not working anymore. With increased number of competitors in every niche and industry, obtaining traffic is simply not enough – you must have targeted traffic to your business in order for your business to survive. This is where Market Segmentation comes in.
Here are three great reasons why you should segment your market.
Reason 1: Increase Your Business Revenue
Market Segmentation allows you to carry out targeted marketing to a targeted customer group.
Not everyone who comes into your business nowadays wants the exact same thing you have to offer. People have different preferences and tastes, and along with higher buying power (more people are getting richer), they demand things more catered for them.
This is where segmenting comes into play. With segmentation, you can differentiate your customers into various ‘groups’ with similar ‘characteristics’, ‘preferences’, etc. Basically, anything based on your psychographics or demographics requirements.
And with that, you can then carry out a targeted marketing and/or promotional effort to these various segments of customers. You are able to match your business’ strengths and offerings to the customer segments most likely to respond positively to them.
This improves your conversion rates of your products, in contrast with traditional mass marketing methods. Increased conversion rates equals increased revenue. And with all things constant, increased revenue means increased profits.
Reason 2: Reduce Costs
Market segmentation reduces costs.
Wait- what? Reduces costs? How is that possible! I mean, with more segments to market to, marketing costs should increase ain’t it?
Well, that’s true. However, here’s the tip: with segmentation, you can choose and select which customer segment to market to! No one said that you need to market to ALL your customer segments. Sit down, think it through, do some research, and find out which of the customer segments are the most profitable to market!
As such, with better selection of market segments (more profitable), your costs should decrease.
Reason 3: Build Better Customer Relationships
Market Segmentation also allows you to build better quality customer relationships.
With a more targeted marketing and promotional approach to specific customer segments, your customers will feel more understood and appreciated as you give more targeted and hopefully, more in-depth information or promotions to your customers.
In contrast with traditional mass marketing, the quality of contact and the more targeted approach to these customers will increase your customer relationships.