Segmentation – What It Is and Why You Should Do It
Ask yourself these 4 questions:
- Do you have a business that is so complex that you can’t seem to summarize it when you’re talking to someone?
- Is your business so multifaceted that you can’t seem to provide any less than an advanced dissertation when someone asks you what your company does?
- Are you trying to create a massive brochure so it will say everything to everyone?
- Are you trying to save some cash and just do ONE marketing piece and have it cover all the bases?
If you answered yes to a single one of those, segmentation is probably going to improve part of your business’s situation immediately. First of all, what is it? A segment is a section. Your business has sections. Your market base may have sections of clearly different demographics too. The act of sectioning and recognizing sections is segmentation. You should treat your business and your demographics accordingly.
Let’s use a realistic example and say you make software products and consulting services. Some of your software products are for the the public’s virus protection, some are for big companies’ data vulnerability protection. And then the other half of the business is in doing computer consulting for smaller businesses and home users, and contract consulting for big companies where you work on a retainer basis. So, right there, in and of itself is FOUR different segments.
So, what are you going to do with your four segments? You have the public, broken down into 2 categories, and the big companies, broken down into 2 categories. At a minimum, you MUST break your marketing down into the 2 major category holders (or demographics)… public and big business, and understand how each buys. The public buys on emotion, big businesses buy more on facts. Based on that information, wouldn’t you agree that you need at least 2 different campaigns* in order to maximize your sales?
*Understand that when I say “campaign,” I do not necessarily mean a hundred thousand dollar advertising campaign. I mean collective marketing effort designed to bring in leads/business. This could be something as simple as a direct mail piece or even a cold calling spree.
If you want to further segment your market, let’s say within your “public” category, you have 2 major offerings, that are worlds apart: a service and a retail product. You can cross promote the offerings within the demographic, but the targets are entirely different and need to be marketed as 2 separate ideas.
The next part is cost. What will segmenting your business offerings cost you? Well, think about what it will cost you if you don’t. If you confuse your audience or can’t even squeeze out a simple explanation of what you do, you’re turning people off and losing business. People do not buy what they do not understand or have been inclusively and incorrectly targeted for. If you segment, you’ll be able to show off like you’ve never shown off before. Nobody says you have to go out and spend tens of thousands of dollars on each campaign. You may not even need to spend very much at all. But you do need to spend the time figuring out where the lines of distinction are, and evaluating the benefits of segmentation for your business.
“When you try to be everything to everyone, you end up being nothing to no one.”