What Are Segmentation Variables in Marketing?

What is segmentation in marketing?

Segmentation in marketing is a type of strategy that allows you to aggregate potential and existing customers into subgroups based on shared characteristics, such as age, location, or past shopping behavior.

As a result, businesses can target these market segments differently with campaigns that are relevant to their needs. Segmenting your audience is also valuable in attracting consumers who are most likely to make a purchase or interact with your brand.

Ultimately, segmentation allows you to develop a deeper understanding of your audience, including who they are, their needs, interests, and behavior, so you can create a more effective marketing strategy.

In fact, marketing segmentation makes companies 60% more likely to understand customers’ challenges and 130% more likely to know their intentions. With this information at your fingertips, you can tailor your content to their specific pain points and desires.

What are marketing segmentation variables?

Since your marketing campaigns aren’t going to be relevant to everyone on your contact list, it’s a good idea to build audience segments based on needs, shared beliefs, online behavior, and so on.

Marketing variables help you split an audience into segments by providing you with possible categories to group your contacts into. The 4 main types of market segmentation include demographic, geographic, psychographic, and behavioral–which we’ll cover more in depth in the next section.

An example of a marketing segmentation variable would be age. So you may use popular slang and colloquial language in your campaigns if a particular segment is made up of Gen Z teens. You can also leverage well-known influencers and celebrities to attract more like-minded consumers to your brand.

What are the most commonly used segmentation variables?

There are several characteristics marketers can use to divide their audience into categories.

That said, a few of the most commonly used variables include:

Demographic segmentation

Demographic segmentation enables you to understand who your target audience is, which is critical for building customer personas. A customer persona is essentially a profile used to represent your target market according to the data obtained from segmentation. Segmenting based on personas can provide 90% of companies with better knowledge about their audience.

This type of segmentation is also an excellent place to start if you want to understand your audience and if you’re just learning the ropes of segmentation since it’s easy to use.

Demographic segmentation variables include:

• Age
• Gender
• Religion
• Income level
• Ethnicity
• Size of household
• Occupation
• Education
• Marital status

Example: Say you run a wine company and the majority of your audience is married. In this case, you may promote a special wine bundle for couples to these contacts.

Keep in mind that demographic variables may look different for B2B (business-to-business) organizations. Potential variables include:

• Size of the company
• Industry

Geographic segmentation

Geographic segmentation tells you where your audience is located. Like demographic segmentation, categorizing your contacts according to geographic location is straightforward.

Here are a few geographic variables you can use to divide your audience:

• Location (Includes factors such as zip code, city, state, and country)
• Culture
• Timezone
• Language
• Climate
• Population density

Example: If your target market is located in an area where the dominant language is Spanish, you can send marketing postcards in Spanish to inform potential customers of your next big in-store event.

Psychographic segmentation

Psychographic segmentation enables businesses to segment their contacts based on psychological traits that influence shopping. Variables include:

• Attitudes
• Values
• Social status
• Lifestyle
• Personality
• Interests
• Opinions

While it can be difficult to segment audiences using this approach, doing so results in highly effective marketing campaigns. This is because psychographic segmentation provides insight into why consumers buy certain products.

Example: A brand that focuses on plant-based food products may have an audience segment of vegans, vegetarians, or pescatarians and meat eaters who wish to consume less meat.

Behavioral segmentation

Behavioral segmentation refers to a type of market segmentation in which you group your audience based on consumer behavior, allowing you to see how customers interact with your business. With behavioral segmentation, you can see what your contacts are doing on your website, determine which ones engage with your brand the most, and identify patterns to plan ahead.

Variables of behavioral segmentation include:

• Purchasing behavior
• Stage in the customer journey
• Occasion or timing
• Usage behavior
• Benefits sought
• Customer loyalty
• Customer satisfaction
• Engagement

Example: You may send special deals and discount codes to those who signed up for your loyalty program but have not made a purchase yet.

Should you use segmentation variables?

Leveraging segmentation variables to create subcategories for your audience can help you make more focused marketing strategies and tailor your messaging according to the needs of your contacts.

Some other benefits of using segmentation variables include:

Enhance your messaging

It can be tempting to build marketing campaigns with generic, non-personalized content; after all, it’s easy and fast. However, this type of content can be vague and irrelevant to your target audience. But you can enhance your messaging by understanding your customers via applicable segmentation variables.

Use resources more wisely

Instead of sending an email campaign to everyone in your contacts or developing an ad for your entire audience, you can focus on a smaller pool of people and obtain better results. This can help you spend less money or valuable resources and ensure they’re used effectively.

Develop a stronger marketing strategy

Your marketing campaign can encompass different strategies, such as email automation or digital advertisements. With segmentation, you can ensure that your content is relevant and tailored to your audience–regardless of which type of tactic you use.

Boost brand loyalty

Encouraging clients to be loyal to your brand can increase repeat sales and help you build a community. As such, your audience may be more likely to recommend your brand to people they know and advocate for your business.

Ensure consistent branding

Segmentation is also valuable for ensuring the consistency of your messaging since it can help you stay on brand. So no matter who your segment is, they’ll see a consistent marketing campaign that aligns with your organization.

How to start using segmentation variables in your marketing

There are many types of segmentation variables you can use in your marketing, so how do you know which ones to utilize at your brand?

Take a look at the following steps if you’re interested in using segmentation variables today.

Determine your objectives

The first step is to determine your objectives. What are you hoping to achieve by segmenting your audience? For example, do you want to raise brand awareness in areas where you have a physical retail store established or strengthen your relationship with your most loyal clients?

Verify the viability of your segments

It’s a good idea to verify the viability of your segments, as not all segments will align with your marketing strategy or overall business goals. It’s important to ensure the viability of your segments to prevent wasting resources. For your segment to be successful, ask yourself whether it’s stable, accessible, and competitive.

Use segmentation tools

You can use segmentation tools to organize your audience into subgroups that make sense for your business. With Mailchimp, you can also leverage pre-built market segments to ensure the success of your engagement or buying behavior strategy. These types of tools save you valuable time and money.

Develop your marketing segmentation strategy

You’ll choose between a concentrated or differentiated approach when developing your marketing segmentation strategy. Concentrated marketing strategies will only focus on one segment, whereas differentiated marketing strategies will focus on catering to multiple customer segments. So if you want to target more than one segment, a strategy that revolves around differentiated marketing may be more suitable.

Create more effective marketing campaigns with market segmentation

Market segmentation allows you to split your audience into subgroups, providing an inside look into who your audience is, where they’re located, why they make purchasing decisions, and how they interact with your brand or website.

Segmentation also makes it easier to create effective campaigns that are tailored to the specific needs of your target market. When planning your strategy, you’ll choose between demographic, geographic, psychographic, or behavioral variables.

While segmenting your contacts can eat away at your time, our segmentation tools make it easy to build segments and target customers based on their activity, traits, and behaviors. Now, you can create more personalized campaigns that align with your segmentation strategy in less time and enhance your marketing efforts.