Audience segmentation can help businesses create more effective and targeted marketing strategies. Some companies hesitate to sort their audience into different categories because they worry about excluding potential or current customers. However, businesses that use audience segmentation may have an easier time creating marketing content that is less generic and more engaging for a larger customer base. In this article, we discuss what audience segmentation is, why audience segmentation matters, ways to segment your audience and how to complete audience segmentation.
What is audience segmentation?
Audience segmentation is a marketing tactic that categorizes your audience into subgroups based on shared traits or behaviors. Audience segmentation enables marketing departments to tailor their content to and strengthen connections with each subgroup. A variety of tools for search engine marketing, social media marketing and other channels can make audience segmentation easier for marketers.
Why is audience segmentation important?
Audience segmentation helps marketers personalize their marketing strategies for different types of people within their target audience. When marketing departments match their marketing efforts to relevant subgroups of their audience, they can:
- Raise retention rates of existing customers
- Build stronger relationships with new customers
- Create a customer-first mentality
- Distinguish their marketing efforts from competitors
- Gain new sales leads
- Improve conversion rates
Common types of audience segments
Here are some ways you can segment members of your audience:
Demographics provide objective facts about members of your audience. This is one of the most common methods for audience segmentation, likely because it is easier to gather and categorize your audience compared to some other methods. Demographics can include:
- Geographic location, whether by zip code, region or nation
- Income level
- Marital status
- Members of household
Some of these demographics may help your marketing strategies more than others. For example, while a laptop company might find that there are no significant differences between genders purchasing their products, a beauty product company could benefit from segmenting their audience by gender.
Some marketing teams group their audience based on the actions they take while browsing online. Shared behaviors to segment your audience by might include:
- Which items or services they buy
- What motivates them to make a purchase
- How often they buy online
- When they shop, such as seasonally or before holidays
Segmenting your audience by behavioral patterns can help you optimize the best time or method for connecting with those customers. For example, if you notice a segment of your audience regularly engages with your business before a major holiday, reach out to that group in the weeks leading up to major holidays. If another segment of your audience makes purchases on a monthly basis, then you might benefit more from contacting that group throughout the year on a regular schedule.
Stage in a buyer's journey
Customers at different stages of the buyer's journey may benefit from different marketing strategies. The stages of a buyer's journey typically include:
- Awareness: Customers in the awareness stage are usually looking to fix an existing issue or problem but do not yet know how. The best marketing content for these customers usually helps provide them with possible solutions. For example, if a segment of an energy company's target audience wants to improve their home value but doesn't know how, provide them with content about how energy efficiency can increase their home's worth.
- Consideration: At this stage, customers know what service or product they need but are still researching what factors are most helpful to that service or product. Customers at the consideration stage might engage more with content that highlights detailed information on relevant features. As an example, if your company makes electronics, consider sending this audience segment more detailed information about your products or current customer reviews.
- Decision: When customers are in the decision stage, they know both the solution to their problem and how they want to resolve it. At this point, a customer is typically choosing between several items or services or has chosen one but is searching for the best price. Customers in this segment could be most engaged through high visibility and lower prices. It might be most effective to reach this segment of customers through targeted or shopping ads.
Level of engagement
Customers who engage with your brand regularly might benefit from a different marketing approach than customers who engage more sporadically. Marketers can determine a customer's engagement level by looking at several factors such as:
- Purchase history
- Browsing history
- Subscriptions to your newsletter or social media
- Sharing reviews or feedback online
People who regularly engage with your brand may prefer to receive more detailed content such as loyalty programs or insider knowledge on your newest products. Customers who engage less frequently might benefit more from content that emphasizes the value of your products or the best features.
You may notice that some of your potential customers are more likely to look at your content on their mobile devices. A customer's preferred device matters because desktop browsers display websites differently than mobile browsers. Mobile device users might get frustrated more quickly if they find that certain buttons or functions are too challenging to access on their smaller screens, so it's best to optimize your website based on what type of device a customer is using to view it.
A customer's preferred device may also affect the way they interact with content. You might find, for example, that customers who interact with your brand primarily through mobile devices engage mostly with shorter emails, social media posts and other condensed content. Creating an audience segment for this group would then allow you to target them with more compact content.
Psychographics is a marketing strategy that analyzes a user's online behaviors to guess their emotions, values, interests, goals, wants and personality traits. Knowing a customer's psychographics can help marketers highlight the qualities of their products or services that matter most to that audience segment.
For example, if you discover a segment of your audience enjoys comedy films and TV, consider targeting those customers with humorous content. As another example, if you learn that a segment of your audience enjoys traveling, you could emphasize how your product or service reduces costs so they can spend more on vacations.
Some marketers find it helpful to distribute different content to customers based on how happy those customers are with their products or services. Marketers can reach out to customers who left negative feedback with content such as apologetic emails, reassurances you have worked to address the problem or discount codes. For those customers who already have positive feelings towards your brand, it may benefit your business to send them content with other products or services they might like, tutorials, service reminders and other content that builds on their positive engagement.
Many marketing teams find that they have the most success when they combine multiple audience segmentation strategies. It is possible to combine two or more of the above audience segmentation methods.
For instance, if you discover that most of your clients who are business managers visit your content on their desktop browsers, then you could create an audience segment based on both this demographic information and device preference.
Combining different types of audience segmentation can allow you to further personalize your marketing content to various groups.
How to complete audience segmentation
Here are some steps for creating an effective audience segmentation strategy:
1. Create audience segments that are detailed enough for your business
Audience segmentation helps you market better to specific groups within your audience. With no or limited audience segmentation, businesses may find it challenging to address the individual needs of customers.
However, the opposite is also a potential concern. If you create audience segments with criteria that is too specific, then only a small percentage of your customers might fit into that group.
Let your company's customer data guide your audience segmentation. For example, if 1% of your customers are men in a rural location and 70% are men in a big city, it is a better use of your time to focus on the 70% who live in cities. Ideally, you can then find a more useful way to segment your customers who live in rural areas, such as if you notice they are most motivated to make purchases in the spring.
2. Set and measure goals
Setting measurable marketing goals helps you to see if your audience segmentation is effective. While one of your goals is likely to engage your customers more, it's difficult to know if or when you have achieved that goal because its parameters and aim are vague. Your marketing department should create goals that can measure if their audience segmentation tactics are working. Here are some sample goals:
- Increase product or service sales by 30%
- Add 200 followers on social media
- Raise your ad click-through rates by 60%
- Gain 40 customer reviews
- Improve conversion rates by 15%
3. Use and optimize different channels
Experiment with how different channels affect the engagement level of your various audience segments. Channels used to communicate with your audience might include:
- Social media platforms
- Print media
- Radio ads
- Digital ads
Track how each of your audience segments interacts with these channels. You might find, for example, that your customers who are more introverted prefer email marketing, while customers who are more extroverted typically engage through social media. With this knowledge, you could then customize your future email and social media marketing efforts to these two different audience segments.
4. Be willing to try new tactics and make changes as needed
Sometimes, the particular method used to create your audience segmentation might not work. Your current audience segments might also work for a few months before changing. Your business's audience segmentation may take a few tries to get the most effective results, and some businesses find their customer profiles continually shift.
If your audience segmentation is not working as effectively as you had expected, be willing to change the segment criteria or method. Look over your customer data again and see if you can create new or altered subgroups of your customers.