In today’s digital world, your customers are being wooed by a multitude of offers for their attention. How do you stand out without spending your way into bankruptcy? One way to optimize your ad spend is by segmentation, or dividing your existing and potential customer base into sub-groups based on specific characteristics. By separating your prospects into segments by what makes them unique, you can market more effectively to those segments using the three strategies here.
1 Identify the segments
Your goal in segmenting your audience is to find those segments with the most potential for growth and/or profitability. Typically, you will segment based on demographics that are similar to those of your ideal or target customer. The most popular and useful demographic profiles include age, gender, occupation, marital status, family status, income, education, living situation and ethnicity, though you should use only those that are relevant to your product or service.
2 Select a focused or differentiated strategy
After creating your segments, decide if you will market to just one segment or to multiple ones. Pursuing only one narrow segment is a “focused” strategy that is excellent if you’re low on startup cash, because it allows you to really understand that market segment and maximize your precious marketing spend early on (when you need it). With the “differentiated” strategy, you target two or more market segments and develop separate offers for each segment. Personally, I prefer the differentiated approach because I can conduct A/B testing in order to gather more information and optimize spending, then use the results to revert to a focused strategy. Either works well, so it’s up to you to decide which is the best fit for your business.
3 Use social media tools to practice segmentation
One thing I’ve learned about social media platforms is that they can give you a wealth of detailed “segmentation bases,” or variables you can use to segment your market, together with a ton of instant feedback and real data — even if you don’t pay for it. These “bases” include demographic, geographic, lifestyle and behavioral information. For instance, I use Facebook Business Manager to experiment with target audiences, their demographics and their behaviors. After experimenting, I can run a small campaign to try out my theories.
Definitely experiment with your marketing segmentation. Worst case, you’ll have a lot better understanding of the people you sell to. Best case, you’ll find many more efficient ways to sell to them. And remember: solopreneurs don’t have to be solo. We can help fill out the roles you’d like to delegate.