How to find your customers: types and stages of market segmentation

More sales are received by those online stores that know their target audience well: its pains, fears, problems, and needs. This knowledge helps to attract targeted visitors to the site who are really interested in buying.

Otherwise, all promotion comes down to an empty drain of the budget. To prevent this from happening, you should define and analyze the target audience, segment the market, and then focus on attracting the right customers. Read more about segmentation in our article.

Why look for your clients?

Segmentation is the division of potential buyers into separate groups that are similar in terms of requests, needs, behavior, and other distinctive characteristics.

Why is the procedure carried out? First of all, in order to build an individual communication strategy with different groups of customers. For each segment, special personalized appeals are compiled.

It is this approach that is considered the most effective in business and allows you to achieve the highest conversion rates. After all, if you direct efforts to the wrong goal, even the most thoughtful marketing strategy may not work.

Thanks to segmentation, entrepreneurs get answers to important questions:

What customer groups does the company serve?
The most priority ones in terms of profit?
What do they want, what do they think is important?
What exactly attracts customers in the product, what are they guided by when choosing?
How do they see the ideal product, what are the expectations, hidden motives for the purchase?
How can an offer make a buyer’s life easier?
How can audience satisfaction be improved?
Through which communication channels will interaction be more effective?

All this information will allow you to understand how to meet the needs of the target audience, what needs to be done to increase the competitiveness of the online store, how to ensure long-term sales growth, scale up and increase profits.

The main intermediate goal of segmentation is to optimize costs by shifting the focus of attention to the most promising, growing segments. As a result, loyal customers come to the company. They are beneficial for business because:

less sensitive to price fluctuations;
recommend an online store in their environment;
become “advocates” of the brand, defend it when attacked by haters;
the cost of attracting and retaining them is much lower compared to the “cold” audience.

Types and methods of segmentation

The audience is segmented according to various sets of criteria, which are selected for a specific niche, depending on its specifics.

The main areas of segmentation in the B2C retail sector:

socio-demographic features. Gender, marital status, age, education, employment, income, nationality and other obvious factors are taken into account;
geography. The audience is classified by place of residence. You can focus on the country, region, locality, density and population, climate. Specific parameters depend on the territorial coverage of the project;
psychographic criteria. Categories are allocated in accordance with interests, beliefs, lifestyle, character, values. It is also worth paying attention to habits, hobbies, experiences. This kind of segmentation is quite complex and subjective;
behavioral factors. The division into groups is carried out taking into account the peculiarities of interaction with the company. You need to look at the status of the consumer, the degree of readiness to purchase, the level of brand loyalty, the expected benefits / benefits, the stages of the user journey.

In addition, the client base is segmented by activity .

Consumers can be active – they constantly show interest in the product and the company. Semi-active – follow the news, view new items, but rarely buy. Passive – subscribe to the newsletter, but do not open letters and do not follow links.

Passive clients are not always dead weight. It often happens that they can be “rocked” by choosing the right ways to interact.

Another simple segmentation criterion is the type of product. Perhaps different groups of consumers are interested in certain categories of assortment.

You can also divide the audience by:

motivation – what guides them when making a decision, why they buy a product, need a product right now, or are just interested;
situations – in what circumstances he buys, what specifically pushes him to buy;
Needs – what needs the product satisfies.

Selection of suitable division criteria

Choosing the right basis for segmentation is already halfway to success. In this case, you need to focus on the level of competition, the development of the consumer market. The more competitors in the niche and the more difficult the differentiation of the product, the more groups will have to be distinguished.

The right segment consists of customers with identical characteristics that are significantly different from the rest.

The attractiveness of the group is affected by:

the presence of a specific problem and need that the product can satisfy;
value. The segment must be valuable, sufficient in size, and consumer potential. Growth rates, sustainability and the importance of identified needs matter;
measurability. It is important that it is possible to measure priority metrics, track behavior;
availability in various communication channels. It helps to influence the choice.

The most important thing is to find high-margin segments that will give the maximum return on your marketing efforts.

The simplest type of segmentation is based on socio-demographic parameters. But it’s pretty general. In most niches, it’s still worth focusing more on behavioral factors now.

In the B2C sector, the optimal criteria for grouping are explicit and implicit motivation to buy, the circumstances at the time of the decision, and how the product is used.

Segmentation by behavioral factors allows you to identify the reactions, preferences, values of the audience. Based on this information, it is possible to determine how to interest a particular group in the purchase, which triggers, arguments, and communication channels to use.

An example list of parameters for behavioral segmentation:

frequency of ordering;
selection conditions – quality, price, service, delivery speed, and so on;
reason, circumstances – already ready to buy or just interested, buying for a holiday or a special occasion.

In the B2B sector, it is worth considering descriptive criteria – industry, organization size, positioning, number of employees, financial situation. You can also take into account operational factors (technology, status), procurement approaches (purchasing policy, volumes, urgency), line of business, range of goods/services, degree of automation.

In general, it all depends on the niche and goals of the business.

The main stages of segmentation

Segmentation of the market and customer base is carried out in several successive stages.

Stage #1: Preparation

First you need to look at your product through the eyes of a buyer:

what problems does it solve;
the expectations that arise regarding him;
how customers choose.

Try to find out the main characteristics and requirements for the product, the factors influencing the decision. Organize them.

Stage #2: Information Gathering

Next, you need to collect as much information as possible about actual and potential customers.

Get information from:

questionnaires and questionnaires;
review sites;
discussions in social networks and on thematic forums;
records of telephone conversations with managers;
web analytics systems;
accounting programs
registration forms;
CRM.

Stage #3: Data Analysis

The next step is a detailed analysis and comparison of characteristics. Analyze probable decision-making algorithms, find similarities and differences in the identified behavior patterns. Track how the product is used after purchase, whether it helps to solve the actual problem of the consumer.

Step 4: Segmentation

After the analysis, it is necessary to identify groups of consumers with similar behavior patterns and distribute them into separate segments. The selected categories should be radically different from each other.

When choosing segmentation criteria, we recommend that you adhere to the following algorithm of actions:

Identify products that make up 70-80% of sales.
Describe their characteristics, the problems they solve.
Think about what customers these problems are relevant for.
Select criteria by which these customers can be distinguished from a diverse audience.
Formulate segments according to the selected criteria.

Stage #5: Search for target segments

At the next stage, you need to test the hypotheses in the case and select segments that will be targeted for the company.

The correctness of the choice is evaluated by:

compliance with the goals and mission of the brand – the most significant at the moment;
quantitative parameters – the number of potential buyers, market capacity;
materiality of the group – how appropriate it is to focus on this category of consumers;
availability through various marketing and distribution channels;
potential profitability, efficiency in this segment;
opportunities to compete in this direction;
the degree of risks for the company – price, economic, inflationary.

Stage number 6: Development of a marketing strategy

Having completed the segmentation according to business priority criteria – problems, behavior, needs, demographic characteristics – the entrepreneur gets the opportunity to target the audience. To do this, it is enough to build a competent marketing strategy for development and promotion, taking into account the aspects that are important for the selected target groups.

Options for further action:

improve the offer so that it fully satisfies the needs of potential customers;
use techniques in advertising campaigns that will attract the attention of a particular segment (put pressure on pain, remove objections, operate with significant benefits);
develop individual, personalized offers for each group.

Mass faceless appeals do not evoke the desired response from the audience. Ignoring the interests of consumers, the online store is lost in the abundance of other offers and cannot get out of the shadow of stronger competitors.

Competent market segmentation is necessary for a successful struggle in a competitive environment. It allows you to find your customers and create the most effective strategy for interacting with them.

However, simply selecting a few segments at random is not enough. First you need to conduct a thorough preparation in the form of research, collect a lot of information, and only then draw conclusions about which groups of buyers you should work with. Dedicated segments should be measurable, clearly defined, large enough and valuable in terms of profitability, and available for interaction through various channels.