What is "marketing segmentation" and why should I care about it?

What is "marketing segmentation" and why should I care about it?

The ability to distill complex business terminology into concepts which are accessible is one of the most intense feats of any startup or business owner. Explicating on one of the most basic terms, “marketing segmentation” will allow any other overwhelming business concept to fall more seamlessly into place.

In short, marketing or customer segmentation is clustering potential customers into groups. What this accomplishes is condensing your marketing strategy into something more honed. Instead of attempting to market to every person, segmenting can allow you to market to who may truly care about purchasing your product or service. This saves you time, money, and energy because your efforts are in the right places.


Typically, these customer groups are formed by identifying how those individuals respond to marketing strategies so the most optimal and consistent methods can be utilized for ultimate integration, effectiveness, and accommodation. Your products seem more sympathetic and targeted when a brand understands their customer. Overcoming the daunting challenge of competition will seem less so if your customer segmentation is performed appropriately.

Getting started

Here are some initial thoughts to consider before you engage with a method of grouping:

  1. What data will be most useful to gather

  2. How to collect that data with a wide enough sample size to matter

  3. Which sources you will collect this data from and if they are varied enough

  4. Having proper methods of analyzing the data

  5. How to apply the information once it is compiled by implementing marketing and social strategy

Marketing segmentation means very little if one does not know how to execute it.

There are numerous ways to tackle segmentation. Choosing which is most effective for your market is easier to determine after you are able to parse the different methods.


The most widely known strategy is analyzing demographics. This is one of the most easily understood and simple methods because the data is not only easy to aggregate, but it is based on easily identifiable attributes. Obvious demographics to consider when using this type of segmentation are gender, age, geography, household income, education, and so on.


The way this can be obtained is through surveys, analytics, or doing your own physical analysis of your customer base. This is most effective and easy to accomplish when you start at the conception of your business, analyzing your small customer base from the get-go, instead of waiting until your customer base is so large it is impossible to collect accurate data quickly.


The second method of segmentation one can utilize is firmographics. This differs from demographics because demographics focus on the individual and firmographics focus on the business, company, or firm as a congregate instead of the unique workers who comprise it.

Firmographics can be segmented into types of industries, revenue streams, locations, and even number of employees. This is simple to amass in the same way demographics are easy to collect, and also better utilized at the beginning of a project or business so there isn’t too much overwhelm. This helps small businesses, or any, understand how to address businesses of varying sizes.


The third method of customer segmentation is psychographics, which turns into the more complex methods of gathering data about your audience. This focuses on data which is less obvious or tangible, such as gathering ideas about your audience concerning their goals, opinions, ideas, and beliefs.

Ways these manifests are sorting customers into lifestyle choices, personality types, and values. This can be gathered via interview or survey; however, one must do this with caution as these ideas are more complex to verbalize, therefore can translate in more ways than intended when extended to a large audience.


You also have to be sure your audience is deeply connected to self-identity. If your audience is not associated to the ideas of lifestyle, mindfulness, or self-awareness, then this may not be an effective grouping method.


The last form of segmentation is behavioral, the most complex data to collect and to use for grouping your customer base. The way to identify this type of segmentation is through product usage in your audience, such as how the younger generations are more likely to purchase reusable shopping bags because of a rise in awareness to environmental care. Examples of this include usage rate benefits, types occasions, and purchase decisions and those influences. Targeting your audience based on purchase behaviors is the most accurate way to obtain this information.

Utilization and Benefits

Now that you know the different ways segmentation can be divided, it’s time to engage with the method. Conduct research by learning more about your audience, which will allow you to better understand which segmentation is most effective. Make sure your data is able to be quantified in a coherent, cohesive way instead of making it immaterial. Then, test your segments with your customers with different digital and physical marketing strategies.

Compartmentalizing is the most key concept in segmentation. Marketing work does not have to be overwhelming if the market and the audience is broken down into smaller pebbles among the larger potential boulders. Alongside that, it is about creating a more personalized experience for your customers. They do not want to feel obligated to purchase a product; they want to feel encouraged to participate in an idea.

Knowing your audience will not only be more profitable in the long run, it will aid in creating a better product. The wisest minds interacting with a service or product are ones who care about its usage or mission. These are the ideas a creator or brand director should listen to the most. This will make improvements down the road more catered, whole, and sharpened.

Marketing segmentation creates that distinction so you stand among the rest as someone who doesn’t just advertise, you connect and understand.

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