A common mistake for many companies is not understanding their target audience. Market research is the first step in successfully selling your products and services and generating loyal customers.
A market segmentation strategy further divides your target market into subgroups. This technique makes your audience easier to manage and analyze, letting you address the unique quirks of each subgroup. Market segmentation helps you craft more powerful marketing strategies that resonate better with your audiences.
Many data analytics firms include market segmentation in their data management and mining services, helping businesses create more accurate and more effective marketing campaigns.
How do you create an effective strategy?
Analyze your existing customers
Your existing customers tell you what type of people find your product or service useful. If they’re repeat buyers, study the trends in their buying patterns. What convinces them to buy from you again? When do they normally come back?
Use your point-of-sale systems and customer relationship management tools. Pull data to see how much your regular customers normally spend, what kind of products they choose, and how often they visit your physical or e-commerce store. This data should reveal trends related to their behavioral segmentation.
Research their demographic and geographic information as well. What’s the age, occupation, and socioeconomic status of your usual buyer? Are you popular in certain locations? This information will help you tailor your messaging to the kind of people who are more likely to buy from you.
Create a buyer persona
Use the information you got from your customer analysis to create a buyer persona. This describes your ideal customer or the person your product or service is likely to attract.
A buyer persona lets you visualize your ideal customer. This helps you determine the best tone and messaging to use in your marketing copies, making sure you’re attracting the right people.
Identify market segment opportunities
After creating your buyer persona, it’s time to look for market segment opportunities. Ask yourself questions about your brand and offerings. What market gap does your product or service fill? What problems does your brand address? What can you do better than your competitors?
Compare your answers to these questions with what you already know about your existing customers. The differences present opportunities to expand your market or adjust your marketing strategy.
Test, adjust, and improve
Finally, it’s time to test your new findings and buyer persona. Craft and run a marketing campaign based on your research and closely watch its performance. Set clear, measurable objectives before starting your campaign, then measure them at the end of the run.
The results will show you what you did right and what you can still improve. Maybe your research wasn’t accurate or your marketing message wasn’t as clear as you wanted. Use the results and performance of the campaign to improve your next marketing strategies. Continue with this process and continually tweak your strategies based on every new finding.
Keep a close watch on your target market. Consumers consistently evolve, developing new behaviors and expectations every now and then. Observing them lets you stay on top of their needs and demands, so you stay relevant to them even as they grow.