Market segmentation underpins your business success. Identifying which customers you want to serve leads into creating value propositions that meet their needs and communicating your value clearly to them.
Improving your segmentation will help to increase your conversion rates, reduce wastage of time and expenses and improve your sales and return on investment.
With online marketing it is possible to become more precise, and target multiple smaller sub-niches, making more detailed segmentation worthwhile. Each niche needs to be accessible, which becomes more possible, and affordable, online.
Segments and niches can be defined by a mix of variables. Here are ten ways you can improve your market segmentation, to more accurately define your target markets, niches and customers.
Five dimensions are more ‘traditional’, outbound marketing segmentation variables. This data is relatively static and is likely to be publicly available. You can use these criteria, for example, if you are choosing contact records from a list broker, or searching in or advertising on LinkedIn.
- Geography – select your target prospects by country, postcode and similar location based criteria
- Industry Sector – select companies to target based on SIC (standard industry classification) code, GIGS, NAICS or similar
- Company size – turn-over, number of employees, profit and similar data is available to refine your selection
- Decision-maker roles and levels – chose function and level, such as finance, marketing, operations, and director, partner, manager and so on
- Products currently used – for example in technology this might be Microsoft, Oracle, IBM, Sage, Apple, or similar specifics in your market.
More contemporary behavior, attitude and buying cycle segmentation dimensions are becoming available. This is becoming accessible and useable largely because buyers are going online and are able to do more research themselves. This is creating changes in buyer behavior, but also segmentation opportunities.
As buyers can research problems online so tools and techniques are developing in response. The five dimensions that follow are more transitory but none-the-less they can be significant in focusing marketing and sales efforts.
- Pain – buyers may have different problems, issues, fears, purchase triggers and so on. These lead to buyers looking for information and solutions in ways that flag up their pain – ie. what search terms they use. Understanding this can help you and your marketing in many ways, from what topics and messages you put in marketing headlines, direct mail copy,adverts, blog articles, and much more. Putting yourself in the shoes and mind of the buyer can be a challenge, but identifying and engaging with the compelling events in their business will pay off.
- Aspirations – what hopes, dreams, ambitions, change and goals do your potential buyers wish to satisfy? In B2B this might be any or all of personal ie. career promotion, positional ie. good for their department, or company level ie. revenue, profit or strategic goals. Identifying and engaging with what success looks like for the buyer helps align benefits oriented messages that you create and use to engage and develop the sale.
- Buying stage – how much progress has the buyer made through their emotional and rational buying process. Their questions and information needs will change, for example as they need to win over other parties to the decision, and they start to focus on benefits realisation and changes needed. The search terms they use can indicate where they are on their buying process, and help you identify what stage they are at when they arrive at your website, and what pages and messages they read on arrival.
- Information sources used – where do your buyers go to investigate the need that you can ultimately satisfy? They may go online to forums and discussion groups, to trade events and conferences, to advisers and trade associations, to company websites, or probably a mix of all of these and more. Which sources they trust is a big consideration here. With finite resources and an increasing number of options you need to choose carefully where to go.
- Attitude to Risk – are your buyers innovators and pioneers, or are they very cautious, or somewhere in between? If there are several people in the buying group chances are some are innovators (who you might want to engage early on) while others are more cautious ( people who you and the innovator need to win over). Reputation, references and social proof help in this area particularly.
As a business owner, entrepreneur or marketing and sales manager there is real benefit to be gained from a clear and fairly comprehensive view of segmentation. Defining multiple niches based on different mixes of the above criteria will enable more precise lead generation to follow. It is also important to agree within your team which are the segments and profiles you consider most fruitful and higher priority.
Market segmentation and lead definition
Defining your ‘ideal’ leads based on a mix of the above criteria is one very useful and important outcome. Going further and defining ‘Marketing qualified leads’ ie. ones which are the right passive profile (top 5 criteria), and ‘Sales qualified leads’ ie. ones which have the right active profile, (second 5 criteria) together with momentum, will increase the quality of your sales-ready leads.
Multiple niches and scenario planning
Identifying several niches, along with outline forecasts for revenue potential and marketing and sales expenditure will assist you in short-listing the more attractive segments. Scenario planning can be a useful way to gather information and evaluate options. This will help you to prioritise and decide where to allocate your management time and your marketing expenditure, your sales resource, and other resources in your business.
Target segments for Wurlwind
As an example, at Wurlwind we have identified a number of market segments to target including:
- Technology companies, in Bristol and the South West, with 3 -30 employees, where the MD wants rapid growth through a steady feed of sales-ready leads but doesn’t yet have dedicated in-house marketing resource
- Marketing agencies, in the Bristol and the South West, who need sales process and systems input into bids into B2B prospects, alongside their creative talents
- Website developers in Bristol who want to increase the value add to their clients by better aligning the website to the end-to-end sales process and goals of their B2B clients
- Business owners and entrepreneurs (solo-preneurs to 30 person businesses), in Bristol and surrounding area, who need to improve lead generation and sales conversions and want to improve their marketing and sales systems.
If you are in one of these groups, and if this approach would help you to identify, define and evaluate segments and plan marketing and sales campaigns to generate leads and win new customers please get in touch, via email or phone.