Target-Audience Segmentation: Why You Need It and How to Do It in Five Easy Steps

Target groups are strategically identified groups of customers interested in a specific product or service. This is the foundation on which all activities are based.

Research and experience show that “general” advertising or marketing doesn’t work: you can’t sell everything to everyone. There is no revenue growth without dividing potential buyers into target groups.

In today’s competitive landscape, many B2B companies are rethinking their strategies and this often requires more careful segmentation of the target audience, both to sell more accurately and to create a more efficient marketing budget.

That is why it is important to understand segmentation in more detail and the best way to do it to ensure increased sales.

Mistakes that hinder sales

Offering goods or services to those who do not need them is a waste of resources. If you’re using a large audience, follow the “when you’re satisfied” method.

For example, everyone needs windows, but for B2B marketers, this large original target audience (“everyone”) can be divided into architects/designers, builders, hardware stores, distributors, and developers. One window can be used for resale, the other for sound insulation and energy-saving, the third for interior decoration, and so on.

The value of the same product is different for each segment of your target audience. Large audiences must be divided into smaller groups for ads and messages to work.

Personalized communication assumes segmentation

After the customer decides to buy, it is the job of the marketer to establish personal communication with the potential customer. The company that best knows the customer … wins.

Sales representatives must be able to assign their customers to any of the segments defined by their basic attributes and avoid the possibility of a customer falling into multiple segments at the same time.

When they point out, marketers can develop ads that address the problems, needs, and expectations of each group. They can suggest a suitable product mix to meet the needs of a specific segment. And they can take advantage of special opportunities, promotions, bonuses, and discounts based on the behavior and emotional characteristics of their target audience.

The main value of segmentation is as follows: representatives of a large target audience are more likely to buy your product or service. When you’re trying to reach a large audience, you spend all the time guessing what the person wants when selling it.

Audience focus parameters

When dividing a business group into segments, it is necessary to take into account the region in which the company is represented; product characteristics, service expectations, and requirements; your motivation; and, of course, your decision-makers.

Here are some examples of possible target criteria; Using it, you can build dozens of segments:

  • Industry: niche and market position (raw materials, manufacturing, construction, retail, distribution, design, etc.)
  • Geography: position and size of the network (local, federal actor, global network, etc.)
  • Pricing policy: low budget, high value / premium, or a combination of these
  • Product performance: mix of products and services needed to export
  • Company size: number of current projects, sales volume, annual revenue
  • Qualification of personnel: specialization, experience
  • Options: production/processing methods, automation systems, etc.
  • Behavioral parameters: urgency and volume of purchases
  • Buyer profile: supplier loyalty, risk assessment
  • Purchasing phases: selection criteria, purchase motivation
  • Purchasing Committee: responsible for the most important decisions Beliefs: stereotypes, doubts, objections
  • Company history: new, current or old customer
  • Collaboration with competitors

Much of this information can be found in public documents and online surveys, while some metrics are more subjective and depend on focus groups.

Unlike the consumer market, segmentation of the corporate public is done less frequently, once every 2-3 years, which is usually sufficient to make adjustments according to changes in demand.

Five steps to reach your target audience

  1. Identify all possible criteria

Write down all the parameters that theoretically can be applied to your target audience (use some ideas in the list above)

  1. Perform customer analysis

Divide the audience into groups:

  • Loyal: satisfied with the degree of cooperation
  • Complicated: alternative or any periodic question
  • Potential: Currently working with competitors
  • Impossible: I will never buy
  1. Compare the data

Fill out a table for each customer group and target criteria.

  1. Emphasize the hearing segments

Choose different criteria that are different for your target groups. Find options that influence or override the purchase decision.

  • Here are some examples of hearing segments from the table above:
  • Certified resellers with a maximum of 50 employees. Product quality and service level are more important than price.
  • Construction companies with more than 1000 employees. Fast and cheap deliveries are important, as are refurbishment stores, but this customer is dealing with the end consumer in a different sales cycle, which means that there are several points of conversation at the point of sale.
  • Show resellers with less than 30 employees. Pricing is important, retailers are well known locally and have limited resources for marketing, training, and maintaining their sales force.

As you can see, at least three hearing segments have been identified in just one sector. It is important to look at the smallest details because something that attracts one customer can alienate another.

  1. Choose a marketing strategy

Determine the details of your advertising campaigns: methods to influence your audience, capture and retain customers, and manage objections based on the needs of your target audience.

Filtering your audience can help you reach your goals more quickly. Protect your assets by researching untargeted customers before entering the marketing process. Why try to sell to an audience deceived by ads and end up buying nothing?