In today’s business landscape, competition is as fierce as ever. Businesses aren’t just competing on prices and the value of their offerings, but the entire customer experience.
In fact, brands that provide a good customer experience generate 5.7x more revenue than competitors that fall short. To ensure you are providing a quality customer experience, one of the first steps is implementing audience segmentation in your marketing strategy.
But what is audience segmentation?
In this post, we’ll define what audience segmentation is and why it's important, give examples of audience segmentation, and share best practices so you can attract more quality leads and optimize your sales funnel. Let's get started.
Audience segmentation is the process of dividing a target audience into smaller, more homogeneous groups based on shared characteristics such as demographics, interests, behaviors, and other factors. This allows marketers to create more targeted and personalized campaigns that are better suited to the needs of each segment.
Let’s say, for example, you own a retail store for sports apparel. You might divide your audience into different age groups and sports preferences. For instance, you could target senior citizens who enjoy golf, adult women who practice yoga, and young men who are interested in basketball.
By segmenting, you can tailor your messaging and content to specific groups, making it more likely to resonate with the target audience.
Audience segmentation is important because it allows you to tailor your marketing and outreach strategies to different groups of people. By segmenting your audience, you can better understand your target market and create more effective campaigns that are tailored to the needs and interests of each segment.
This helps you maximize your return on investment (ROI) and reach your desired goals. In fact, studies have shown that segmented, triggered, and targeted initiatives generate 77% of marketing ROI because most consumers want highly personalized interactions from brands.
The process of segmenting your audience is relatively simple. Here’s a breakdown of how to do it:
1. Identify your target market: This involves understanding the characteristics of your target audience and their needs.
2. Gather data: Once you’ve identified your target market, the next step is to gather data. This can include demographic information, psychographic information, and behavioral data.
3. Analyze the data: After you’ve gathered the data, you can analyze it to identify patterns and trends. This can be done using statistical methods or machine learning algorithms.
4. Create segments: The analyzed data can then be used to create segments of the target audience. Each segment should have similar characteristics. But more importantly, they should have a similar problem or need for your product or service.
5. Test and refine: The final step is to test and refine the segments. This can be done by testing different visuals, marketing messages, channels, and strategies to see which ones are most effective for each segment.
Marketers often segment people according to factors like their demographics, geographic location, interests, behavior, business type, and even device usage. The strategies you use to segment your audience should depend on the offerings you’re delivering. The data should ultimately help you better position your brand and craft your messaging to where it will resonate with your audience best.
Let’s take a closer look at the different types of segmentation.
Demographic audience segmentation is the process of dividing a target audience into distinct groups based on shared demographic characteristics. This allows marketers to personalize campaigns and messaging based on the needs and interests of different demographics. Demographic segmentation could include:
If you run a beauty brand with various products from anti-aging creams to acne spot treatments, you could segment your audience based on age. For example, you’d probably target an older customer segment for your anti-aging products and a younger audience for acne treatments.
Geographic audience segmentation involves dividing a target audience based on their geographic location. This allows marketers to tailor their messaging and campaigns to the specific needs and interests of different areas. Geographic segmentation could include:
For brick-and-mortar businesses – or ones that only sell products in specific regions – geographic targeting is a must. Geographic segmentation can be product-specific too.
For instance, if you run an online auto parts store, you would want to concentrate your online marketing efforts for products like tire chains on regions that receive a lot of snow, like Alaska, rather than warmer climates, like Florida.
Psychographic audience segmentation involves dividing a target audience into different groups based on their psychological characteristics. This allows marketers to create campaigns and messaging suited for customers with different interests and values. Psychographic segmentation could include:
Let’s say, for instance, you own a vegan food delivery service. You could segment your audience based on why they are interested in veganism, such as those who are health-conscious, environmentally conscious, or animal rights activists. You could then tailor your marketing messages to appeal to each of these groups and target them with appropriate meal options.
Behavioral audience segmentation involves dividing a target audience into smaller groups based on their behaviors. This allows marketers to tailor their campaigns to customers with specific practices or based on where they are in their customer journey. Behavioral segmentation could include:
For example, if you have a customer at the beginning of their journey, they are most likely just finding out they have a problem that needs solving. A customer near the end of their journey, however, already knows their problem and is ready to buy. Rather than sending them the same messaging, segmentation can help you tend to each customer’s specific needs.
Firmographic audience segmentation involves segmenting an audience based on the characteristics of their business. This type of segmentation is used by B2B companies to help them target specific types of businesses.
These types of data sets are becoming increasingly more important too, with the rise of account-based marketing (ABM) techniques. Firmographic segmentation could include characteristics such as:
For instance, if you own a company that sells medical devices, you’d want to focus your marketing efforts on the healthcare industry such as hospitals, clinics, and other health care centers.
Technographic audience segmentation involves using technology-related data to divide an audience into distinct groups. This type of segmentation looks at the technology customers use to create segments of people with similar characteristics related to technology use. Technographic segmentation could include things such as:
This type of segmentation is important to consider in today’s digital age, as people browse and interact with your website and content differently depending on what device they are using.
For instance, mobile users are more likely to consume your content when they’re on the go. You can create a specific message for mobile and structure it so that users can quickly tap through a survey or like an image, increasing the likelihood they’ll remain interested.
Technographics can also be important for products or services that bode well with certain types of software as integrations or add-ons.
Once you’ve decided which segmentation strategies you’d like to use (or if you’ll use a combination), you’ll be able to begin planning your marketing strategy. Before you dive in, keep these tips in mind so you can ensure you are marketing strategically.
Although the goal of audience segmentation is to be as specific as possible, there is a limit to how specific you can segment your audience. If your segment is so small that hardly anyone can fit in it, that's an issue.
Either too few people will be reached, or you'll end up wasting time and effort producing messages and campaigns for a variety of too-distinct groups.
Concentrate on a small number of groups, but make sure they are big enough to include a sizable portion of your customer base.
To ensure your audience segmentation is successful, you should be continuously evolving the targeted segments. The best way to do this is by setting clear goals and measuring them. Do you wish to reach a larger audience? Get more subscribers? Boost the click-through rates of your email campaigns?
Decide on a goal, and then evaluate how well your segments help you achieve that goal. If the objectives aren't being met, you might need to modify your segmentation to better reach the audience you're aiming for.
Audience segmentation and a multichannel marketing strategy work together to help you reach your target audience as effectively as possible. You’ll find that some segments are more present on certain channels than others.
For example, if you want to reach a younger audience to promote new swimwear, you may find them on social media platforms like TikTok and Instagram. If you run a digital marketing agency, on the other hand, you’ll likely have an easier time finding your B2B audience on platforms like LinkedIn and Twitter.
While social media is a great tool to reach your target audience, don’t forget to use other channels for both inbound and outbound marketing initiatives, such as:
Audience segmentation can help you be more precise, tailored, and deliberate – regardless of the channel, opportunity, or piece of content. And when you strategically leverage several channels, you'll reap the benefits in the form of greater interest, increased sales, and repeat business.
Lead generation tools can help you identify and access audiences that match your chosen segmentation by providing you with data-driven insights into your target market.
These tools can help you identify potential customers, analyze their behavior, and create targeted campaigns to reach them. We’ve listed some great tools below, but make sure to check out the top lead generation tools of 2023 to learn more about what these tools can do for you.
The key to segmenting audiences is having solid, trustworthy data. ZoomInfo offers thorough data on over 100 million businesses and individuals, so you can locate details to assist you in identifying new clients, such as contact information, company profiles, and market research.
For instance, if you owned a digital marketing company that offered products specifically tailored to the needs of small businesses, you’d want to segment based on firmographic data such as a company's employee headcount.
You can locate leads that suit that description using Zoominfo's B2B database, and then utilize targeted outbound calling or advertising to reach those businesses that have the desired employee headcount range.
Apollo.io is another great B2B lead data collection tool that offers a wealth of sales data on over 220 million contacts globally. This data can then be used to create detailed customer profiles that allow you to identify key characteristics and behaviors of your target audience.
If you owned a software company, for example, you could perform technographic audience segmentation based on specific programming languages or development frameworks, such as Java or Ruby on Rails.
From there, you can use Apollo’s database to gather data on the types of tools and technologies these companies use, such as continuous integration platforms or code review tools. Based on this data, you can create targeted marketing campaigns that highlight the specific features of your tools that are most relevant to your audience.
By using audience segmentation, you’ll be able to better understand your target market and tailor your marketing strategies to better meet customer needs.
Once you’ve got new leads coming in, you want to be sure you’ve got a system in place to manage all those leads, starting with a 24/7 answering service, so you never miss a single opportunity.
In order to save you time and effort from the start, our live staff can even manage your outreach campaigns. That way, you can focus on finding and refining your audiences while we take care of the rest.
To learn more, schedule a consultation to discuss what our 24/7 virtual receptionists can do for your business.