What is Audience Segmentationand How Can it Help Businesses?

When you cater to everyone, you serve no one. The same can be true with marketing: when you market to everyone, it’s difficult to reach anyone. That is why audience segmentation is so powerful. 

Let’s look at what audience segmentation is, why it’s important, and some key audience segmentation examples you can use to generate ideas for dividing boosting your marketing effectiveness.

What is Audience Segmentation?

Audience segmentation is the process of dividing your audience into segments based on predefined criteria such as behaviour, geographical location, historical data, product usage and other parameters. In the ad-tech industry, audience segmentation is used for ad targeting.

One example is creating separate ads for audiences based on whether they are iOS users vs android users, window users vs mac users, or desktop vs mobile users. 

A more simplified example would be of an athlete user who responds to ads related to fitness. This is where audience segmentation helps – knowing the preferences and interests of your target audience to present them with targeted advertising so they tend to subscribe or return for more. 

In the past, setting up audience segmentation more difficult, but these days simplified tools in email marketing, SMM, messenger marketing, search engine marketing, and other digital marketing channels such Mapsted’s location-based technology with marketing notification and audience segmentation functionalities, make audience segmentation simple – even for entry-level marketers.

Top 3 Reasons To Use Audience Segmentation

There are many benefits to segmenting your audience, here are the top three:

1. Personalized Audience Treatment.

Today, customers seek personalized experiences and they want super-relevant offers at the perfect time. This became possible once social networks and search engines started collecting a lot of behavioural and demographic data that allows brands to divide people into segments and tailor their messages more precisely.

2. Competitive Advantage.

Fierce online marketing competition makes it harder to successfully market your products. However, with segmentation, you can tailor your ads, and nurture and convert leads into customers more effectively than your competitors.

3. Meaningful Customer Relationships.

To satisfy modern consumers, brands need to educate and entertain them. With Mapsted’s segmentation tools on hand, companies can create thought-out content marketing strategies that appeal to every customer. 

Target Audience Segmentation Strategies 

Now, let’s analyze the ways you can separate your audience segmentation categories. 

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. 

What Are the Different Types of Audience Segmentation?

This audience segmentation strategy helps you divide your audience based on typical marketing demographics. Let’s look at some of the most popular ones:

Age

It’s a crucial segmentation variable since people’s preferences are continually changing throughout their lifetimes. People of various age groups communicate with brands in specific ways, so you need to conduct research and consider these differences when you do your marketing. If you run an apparel business, for example, you need to target different collections to different age groups: children, teens, and adults.

Location

This segmentation variable is vital because people use different languages and have different cultures, climatic conditions and time zones, etc. Aside from this, it’s necessary for businesses in specific areas to target their messages to the local audience. There’s no need to waste your budget on marketing to people who will never make it to your store.

Income

Based on your customer’s estimated salary, you can tailor different classes of products to the right people. For example, in the automotive industry, there is little sense in advertising first-class sports cars to people with lower incomes. In this case, it’s best to promote used vehicles or offer new cars with low APR. And vice versa, people that earn a lot of money are more likely to buy luxury brands.

Occupation

Some niche products are tailored based on employment: medical equipment, woodworking tools, fitness training equipment, software, etc.

Ethnicity

It’s essential to be informed about the cultural differences and conflicts between neighbouring nations. Target your communication by paying attention to the current political and cultural climate in your customers’ countries. Also, conduct research as you grow your business internationally.

Family Structure

Think of “family pack” products in the supermarket. It’s best to tailor such products to families with three and more members. With the data about family structure at hand, you can quickly identify the target audience for such products.

Audience Segmentation Example: McDonald’s

Many big businesses have honed audience segmentation to fine art. McDonald’s, for example, has carefully crafted each menu to suit the geographic area, demographic, and psychographic segmentation. Think all McDonald’s offer the same menu? Think again. In most countries, McDonald’s has considered its audience and tailored menu offerings to the geographic appetite. In Romania for example, BBQ sauce on the McRib is replaced with mustard horseradish and served with a slice of pork, onions and pickles.

Another interesting example is that McDonald’s will build franchises to match the surrounding environments. Instead of building a McDonald’s that looks exactly like an American franchise in a wealthy European neighborhood, for example, they will match the architecture so it is cohesive with the rest of the buildings around it. This is a thoughtful design choice and appeals to their target market.

Behaviour Segmentation

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

Let’s review the most common ways to segment users by behaviour:

• Purchasing Behaviour. Look for any obstacles that keep users from making a decision. People hesitate to purchase for three reasons: they are waiting for the best offer, they are looking for social proof, or some of them are “just looking around” and are not in a hurry. Use shopping holidays to convert the first type, collect feedback from happy customers for the second type, and don’t spend much time and effort on the third type since they aren’t likely to buy anything.
• Benefits. This is a way to divide customers based on the benefits they are looking for. You can motivate them to buy your products or services by stressing the best parts and benefits of your products. For instance, chewing gum gives people clean teeth, fresh breath, a nice flavour, and even an anti-stress effect. Find out the benefits that drive your customers towards making a purchase and emphasize them.
• Engagement Level. Some users occasionally contact your brand, so you can survey them to find out if they see a lack of value or motivation from your side. The others regularly use your service but don’t use its functions to the full extent. Share how-to videos and highlight all the features that will be handy for them. Lastly, people who integrate your brand into their lives require special treatment. You can provide them with bonuses, loyalty programs and greetings on birthdays and anniversaries.
• Special Occasions. This segmentation type helps you deliver your messages at the right time. Utilize events like Black Friday, Cyber Monday, national holidays, etc., to add more reasons to go shopping. You can implement occasion-based segmentation by collecting data from subscription forms, lead magnets, or surveys. These insights will help you build a positive brand image.

Segmentation Based on the Buyer’s Journey Stage 

This audience segmentation strategy enables you to tailor your messages based on where your customer is in their buyer’s journey.

There are three buyer journey stages: awareness, consideration, and decision. In each stage, prospects need different kinds of treatment.

If users have just found out they have a problem, they usually use Google to find a solution. So in this stage, it’s best to have helpful content that will provide answers to your future customers’ questions. It can be an article that outlines how to deal with the problem in different ways.

If a user already knows what kind of product can solve their problem, they will want to learn more about its characteristics and determine which exact product they need. It’s a great idea to show reviews like “best tools for…”

Once they know exactly what they need, users search for the best price. It’s best if your brand is visible in shopping campaign ads, which is a great way to stand out from your competitors.

If users still doubt, you can nurture them with precisely targeted ads on the Notify CRM, based on their search queries and interests.

Target Audience Segmentation Best Practices 

We’ve collected a few best practices that will help you segment your audience in the right way.

1. Don’t overdo it. Audience segmentation is all about balance. If you narrow your audience down too much, it will stop bringing you money because only a few people will meet all of your segmentation criteria. It’s best if you aim at providing every member of your audience with exciting and personalized content in the first place and use segmentation as a supportive tool to help you achieve that goal.
2. Set clear goals. It’s better not to use segmentation at all than it is to segment at random. To segment your audience effectively, you need to develop a buyer persona, create your buyer’s journey, and identify your target audience first. Only then will you be able to set realistic goals for your audience segmentation strategy?
3. Test and improve. It’s important to monitor how your audience changes and adjust your strategies to meet these changes. Sometimes, you need to revise segments that were effective before and do some more research, and tests to create better segments. Your audience is an ever-changing living organism, so there’s always room for improvement.

Your Audience Segmentation Plan

In conclusion, audience segmentation isn’t just a good idea, it is necessary for your business to have sustainable growth and success. If your business needs a hand getting started it is helpful to consult a company that offers analytic tools that can help you derive insights and data from your customers. Mapsted is a trailblazer company that has the entire scope of location analytics available for your every need. 

If enjoyed learning about audience segmentation and how it can meet the goals of your business you may want to check out our short video on What Is Audience Segmentation and How Does It Help Businesses? And if you are curious to know a bit more about Mapsted, this short video, Unlock the Potential of Location Technology with Mapsted will help you learn what we’re all about!