Audience Segmentation: What is Segmentation and How Does it Help with Marketing?

TL:DR;

A marketing strategy based on identifying subgroups within the target audience in order to deliver more tailored messaging for stronger connections. The subgroups can be based on demographics such as geographic location, gender identity, age, ethnicity, income, or level of formal education. Subgroups can also be based on behavior such as purchases made in the past. Psychographics come into play when you have access to insights about your audience’s personality types, values, attitudes, and beliefs. An example is creating separate segments for people based on whether they are family-oriented versus individualistic, leaders versus followers, or adventure seekers versus homebodies.


Many first-time marketers create uniform messaging and distribute it widely to save time. Audience segmentation, however, uses a more refined approach: It organizes your contacts into smaller groups so that you can give them what they really want.

Why is audience segmentation important?

Seth Godin, a prolific author and marketing expert, mentions segmentation as part of his 5-step marketing process in his book, This Is Marketing. "Segmentation" is a component of step 2, "focus."

“We worry about disappointing, missing, offending or otherwise leaving behind someone who might become our customer,” he said in a recent interview with Inc. To avoid this, we try to produce content that will appeal to everyone.

Unfortunately, this can often result in content that’s flat, generic, and “mediocre,” as Godin puts it. In trying to please everyone, we end up pleasing no one.

Audience segmentation avoids mediocrity because it makes your marketing efforts more personalized (or “focused”). It lets you:

  • Define your target audiences
  • Tailor your message to resonate specifically with them
  • Meet a specific need that can help drive up conversion rates
  • Build a relationship with your customers and earn their loyalty
  • Bring in leads to accelerate your sales cycle

When a customer feels like a message was written just for them, they’re more likely to be receptive to what you have to say. Segmentation makes that kind of personalization possible.

So where do you start? Most marketing efforts begin with the creation of a customer persona, or a mock-up personality meant to represent your ideal customer. That persona can include where that person works, whether they’re married, and what their hobbies are.

Personas help you communicate with your customers on their level, especially when it comes to identifying their pain points—and how you can help alleviate them. Once you create those personas, you can separate them into groups.

Types of audience segmentation

Marketers often sort people according to factors like their demographics, behavior, and where they are in their buyer’s journey. What strategy you use to segment your audience depends on the product or service you’re delivering.

If you run a website that sells skiing equipment, for example, it might not make sense to treat people in different geographical locations as separate segments, because most of them probably have to travel to ski. But it might be practical to segment them according to their behavior and level of engagement. People who have been interested in the sport for years and know the products you sell will probably engage with your business differently than people who are just starting out.

Demographics

This is the most common method of audience segmentation—and usually the easiest one. Age, income level, job type, and geographic location are all demographics you can use to sort your audience. This method is popular for a reason: It works.

One type of location-based segmentation strategy is to approach customers during the time of year they’re most likely to need your product. A farming company might be more apt to purchase equipment during harvesting season, for example. In the American South, that could be almost year round, but in other areas of the country, that might be during the summer or fall.

Behavior

This strategy goes a bit deeper than demographic separation. Analyzing behavior means looking at what people buy, how often they make a purchase, and why they buy the product or service.

Someone who makes small purchases on a regular basis, for example, needs different messaging than someone who only makes a major purchase every once in a while. That’s because those people are looking for different things and likely buying for different reasons.

With behavioral segmentation, your message is tailored to reach customers when they’re more likely to convert. Some examples of these groups include prospective buyers, first-time buyers, regular customers, and defectors who have switched to another brand.

Buyer’s journey progress

When you use this strategy, you tailor your messages based on where your customer is in their buyer’s journey.

If you’re not familiar with the term, the 3 basic stages of the buyer’s journey are awareness, consideration, and decision.

A buyer at the beginning of their journey could just be finding out they have an issue to solve. One near the end, however, already knows what to buy and is ready to make a choice. Instead of sending them the same message, segmentation can help you tend to each buyer’s different needs and answer questions they may have.

Level of engagement

Regular customers require different marketing than infrequent ones. If you can tell that someone is interested in your business—they signed up for your newsletter, for example—they’re more likely to be open to your message than someone who occasionally buys something.

This doesn’t mean you should ignore or deprioritize users with low levels of engagement. You can send these users their own tailored campaign. Many brands target these customers with “win-back” offers.

What device they’re using

Not all of your users will browse your website in the same way. These days there’s a good chance that half will be viewing it with their smartphones.

People use desktop and mobile devices differently, and your website needs to accommodate both. Some of the changes you need to make are obvious, like formatting the mobile version of your site for smaller screens. But think about the circumstances under which people will be browsing it, too. Mobile users are more likely to view your site on the go, which means they probably will only have time to read short posts. Save long-form content for your desktop users.

When you optimize a particular message for mobile and structure it so that users can easily tap through a survey or like an image, you increase the chances of retaining your customers’ interest. You can also use this method to let them use their phone to contact you or place an order more efficiently.

Combining strategies

You can use 2 or more of these methods together to expand your reach even further. An example of this is sending an email notification in the summer to a Midwestern farmer (demographics) who buys tractor parts from you on a regular basis (behavior).

Sometimes audience segments can intersect in interesting and unexpected ways. Between 25 and 30% of millennials are mobile-only internet users who use their tablets and smartphones the way other people use their laptops and desktop computers. As mentioned, in general, mobile users are more likely to view your website on the go. But this pattern doesn’t necessarily hold true for mobile-only users. That means that your millennial customers might be interested in reading long-form content after all.

Audience segmentation tips

Once you’ve decided which segmentation strategies to go with, you can put the rest of your plan together. How are you going to target those people? Will it be via email, social, or personalized landing pages? Here are a few tips for marketing smarter.

Keep your segments more widely defined

Although the point of audience segmentation is to aim for specificity, it’s possible to segment your audience too far. It’s essential to have a smaller market with a defined need. If your market is so narrowly defined that it barely contains anyone, however, that’s a problem. You’ll either reach too few people, or you’ll end up spending time and energy writing messages for too many different audiences.

Focus on a few groups, but keep those groups broad enough to encompass relatively wide swaths of your customer base. Instead of “middle-aged customers that buy at Christmastime, pay with Discover, and live in Minnesota,” try defining your audience as “Midwestern customers that make more purchases during the holidays.” The latter audience segment allows for much more wiggle room.

Aim for constant improvement

If the combination of audience segmentation strategies you used didn’t work, experiment with another mix until you find the most effective way to reach your potential customers. Measure the data to see where people are landing on your site, how long they’re staying, and what’s making them leave. Then incorporate that data into your next effort and into the day-to-day operations of your marketing.

A good way to determine if an audience segment you’ve created will be useful is to see if it meets 4 criteria:

  1. Is it relevant and likely to take action? Can your company solve their problem?
  2. Is it distinguishable from other segments? Does it have unique characteristics that set it apart?
  3. Is it sizable enough to be worth targeting?
  4. Is it locatable? Are you able to find out where this group spends their time and communicate with them?

Set goals, then measure them

Marketing goals are important. If your objective is to “reach more people,” for example, define what you’re looking to see from each of your segments. That can include adding 500 more subscribers to your email newsletter, increasing the total number of products you sell by 20%, or doubling your email campaign’s click-through rate.

You should also make sure that your goals for each segment and your company’s overall goals are in sync with each other. Once you’ve set those goals, track them. If you met them, great!

If not, some tweaking is necessary. Setting goals and measuring them is simple—and it can provide valuable insights into the strengths and weaknesses of a marketing plan.

Use different channels

While email lists are absolutely key to communicating directly with your customers, there are more channels you can explore when it comes to building better relationships.

  • Reach out to your customers with posts on social media on the platforms you know they’re most likely to use. Does your company sell ethically made makeup products? See about working with a beauty influencer on Instagram. Do you run a digital marketing agency? Try building a strong presence on Twitter and LinkedIn.
  • You can also reach and provide value to your audiences through blogging, whether it’s through your own site or someone else’s. Write an article that details something useful and position yourself as an authority on your product. If you’re selling cameras, for example, a guest post on a review site or an article on how to clean your own camera sensor could get your company in front of the right eyes.
  • If you’ve got the skills or budget for it, try creating YouTube videos that are relevant to your target audience. Include links in the videos’ descriptions to get more subscribers to your email list or blog.

When you use different channels thoughtfully, you’ll see a return on that effort in the form of increased interest, increased sales, and repeat customers.

Conclusion

Though you might not know every individual’s name, your audience is made up of many distinct groups that will respond to your product or service in different ways.

If you create your content with this in mind, you’ll draw in more viewers, and your viewers will be more likely to convert. In the long term, it also makes them more likely to think well of you and your business. After all, nobody wants to feel like they’re being lumped in with thousands of other faceless consumers. People want to be treated like people.

Take some time to segment your audience and create customized messages for them. It’s worth it—and your audience will appreciate it.

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