The purpose of market segmentation is to enable a company to differentiate its products and messaging and precisely reach targeted customers who have specific needs and wants. It allows the company to increase its overall efficiency by concentrating available resources on efforts that produce the best return on investment (ROI).
When should market segmentation be applied? The simple answer is ‘always’. You want to be engaging with the right personas in your target audience all the time.
Where should market segmentation be applied? Again, the simple answer is ‘across all touch points’. You want to ensure that each engagement channel is purpose-designed, in as much as it can be, to maximize the target audience’s impact.
So how do you do’ market segmentation? In my view, given our purpose of ‘find, segment and engage’, there are three key aspects, namely; a first-rate database, segment viability, and market intelligence.
Heuristic 1: Get a first-rate database
By ‘first-rate’ I mean accurate and current in terms of records and that all relevant information fields are catered for. (Account details, persona details, segmentation details, etc.)
Heuristic 2: Determine segment viability
Determine which segments are commercially most attractive in terms of the need for your solution, size, growth outlook, ease of access, entry barriers, competitiveness, etc.
Heuristic 3: Secure market intelligence
You want to engage with the right people, with the right message at the right time. This is about getting your hands into some market research. Simply put, you need to look.
- Get a first-rate database
- Determine segment viability
- Secure market intelligence