Running a small business is tough work. It entails many details to help businesses become and stay successful. You need a strong business plan, a solid idea, and the dedication to follow through. Many business owners struggle with marketing their product. There are many channels to utilize and the idea may be to access them all. Unfortunately, this is a mistake. When you market to everyone, you market to no one. This is why marketing segmentation is highly important.
What Is Marketing Segmentation?
Marketing segmentation is a strategy involving the process of splitting a broad market into subsets of businesses, consumers, and countries. Once you have done this, you can further divide by learning common needs, interests, and priorities and implementing strategies to find them. When your business is small, it makes sense to break down the total demand into segments so you can choose what you are equipped to handle. Segmenting your market allows a small business to achieve a higher return on investment (ROI) on a marketing investment. What may surprise you is even if businesses are in the same industry, they are likely to have different target markets. The reason for this is brand preference, pricing, and availability of the product.
Segmenting your market
Marketing segmentation involves strategies that are based on many things, each being its own segmentation:
- Behavioral
- Demographic
- Psychographic
- Occasional
- Benefits
- Cultural
- Multi-variable account
- Geographical differences
This explains, in more detail, why the same business can have different target markets. If your business is located in a different country than another of the same business, your marketing needs will be different.
Factors That Affect Market
Segmentation There are also factors that can affect market segmentation. These include:
- Clear identification of the segment.
- Measurability of the segment’s effective size.
- The segment’s accessibility through promotional efforts.
- The segment’s appropriateness to the policies and resources of the company.
Another tool to keeping a customer using marketing segmentation is learning about customer retention. This approach involves the following strategies:
- Learning if your customer is at risk of cancelling your services or switching to another company.
- Asking yourself if the customer is worth retaining.
- Considering what tactics should be used to retain the customer.
This can seem like a daunting task for any new business owner needing to get their name out there, but once you achieve a clear directive, know your exact target market, and understand its needs, market segmentation becomes easier. Instead of trying to conquer the world, you can now narrow your focus, driving customers to your door.