Market Segmentation: Types, Process, and Benefits

Use LinkedIn firmographic targeting for enterprise segments, Google competitor campaigns for high-intent prospects, and product-led growth motions for self-serve segments. Score and Prioritize Segments by Revenue PotentialCreate a scoring matrix that weights segment size, growth potential, and unit economics. Layer Segmentation Types for PrecisionCombine firmographic, technographic, and behavioral data to create multi-dimensional segments that reflect real buying behavior. Effective go to market strategy customer segmentation follows a clear process that layers multiple data types and ties every decision to revenue. Segmented email campaigns drive 760% more revenue than non-segmented sends, which shows the direct financial impact of precise customer segmentation in GTM.

By getting to know your customers better, you can create and execute better marketing strategies from the ground up. Differences between market segments should be clearly defined so that your campaigns, products, and marketing tools can be used as effectively as possible without overlap. If you can’t measure your rate of growth then how will you know the segment is valuable?

There are several different types of marketing segments you can create. It’s estimated that the average person sees an astounding 4,000–10,000 advertising messages each day.3 That’s why it’s critical to target the right market. There you’ll find data-based insights for 500+ consumer segments across all categories and geos ready for you to explore, so you can create better mobile campaigns and better targeting strategies for your business.

• It’s the most commonly used form of segmentation because it’s essentially the root of all of our spending habits.
• Almost 70% of desktop users and 86% of those on mobile abandon their cart before finalizing the purchase.
• The respect shown to customers’ preferences creates confidence and greatly increases engagement.
• Perhaps the most important marketing decision a firm makes is the selection of one or more market segments on which to focus.
• The answer is to put your product users into useful categories—otherwise known as customer segmentation.

Consumer Psychology for Marketing Decisions

When people engage with and show ongoing interest in the brand on any platform, Nike retargets them on other channels. For example, Nike leverages behavioral segmentation to build brand affinity and loyalty with consumers. When considering how to create a successful marketing strategy, look no further than Nike.

With Claritas, you’ll know more about your entire marketing spectrum.

From there, utilizing surveys with your customers and running A/B tests within ad campaigns can give you great insights into the behaviors and needs of your audience. When brands understand their customers' specific needs and preferences through segmentation, they can deliver targeted messaging, relevant offers, and customized products or services that resonate with each segment. It can help you create personalized or tailored marketing campaigns, optimize resources, mitigate risk, increase brand loyalty, and identify niche markets. Leaning in to the existing behaviors of audiences can help elevate their shopping experiences with your brand. It can be trickier to define than the other different audience segments, since it’s not based on easily measurable qualities.It could include considering prior purchases, brand loyalty, or purchase patterns.

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For example, if you run a well-being supplement brand, you might segment customers who spend their weekends hiking and create another segment of people who prefer to go to the gym before work. Over two-thirds of customers want to feel cared for, and will spend more as a result — and with 9.5% of your revenue at risk, it’s critical to understand exactly what each customer wants through customer segmentation. The “target persona” (or “marketing persona”) is, by definition, a personification of a specific customer segment so it’s not uncommon for businesses to create several personas to match the various customer segments they’ve created. Marketers can optimize resources through segmentation by identifying and understanding unique customer segments with diverse needs, preferences, and behaviors.

We help you identify priority segments and maximize your unique operational strengths Bain Partner Tom Springer explains how companies can achieve customer intimacy at scale and transmit essential information about customers to frontline employees. Ultimately, this creates a layered structure of identity, where past experience, present reality, and future aspiration coexist and are activated differently depending on context.

When specific subsets of customers are targeted, your marketing content can become more relevant and effective with the audience you are targeting. It works by placing a cookie on a user's browser, which allows marketers to serve ads based on the pages that the user has visited. The precise targeting strategy involves narrowing down the larger market to a small, specific group of people who are likely to buy for similar reasons.

This type of customer behavior data is often easier to collect at scale and analyze statistically to identify broad trends and patterns. Addressing issues identified through customer behavior analysis directly impacts customer loyalty. This, in turn, significantly increases the probability of higher conversion rates and improved business results, demonstrating the power of actionable insights from customer behavior analysis. Leveraging customer feedback and other forms of customer data to tailor the customer experience is a powerful strategy for shaping customer behavior proactively. Understanding existing customers through customer behavior analysis is key to acquiring new ones.

Both B2C and B2B companies use this approach to clearly identify the customer segments who will have the highest probability of sales. Your customer segments might include people of different demographics who drink tea for health benefits, for a caffeine boost, or as an inexpensive alternative to soda. Segmenting is when you create multiple groups of people who have common traits. Marketing to customer segments involves tailoring strategies to address the unique needs and preferences of specific customer segments.

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