Unless you own a multi-million dollar company, chances are you need to be careful about your budget. With these considerations in mind, smaller businesses often cast a wide net though online marketing to try and reach as many interested consumers as possible.
While the theory here is that greater exposure will lead to a higher return, the opposite is usually true.
Casting such a wide net leaves little room to target your audience, meaning people will see your content, but often won’t engage with it. As such, you end up with a lackluster ROI and a client base that is just as small as when you began.
With a little extra research and effort, you can combat this problem through market segmentation— a practice that not only helps you understand your audience better, but allows you to spend time and resources on only those who are most likely to become lifetime clients.
Begin at the Beginning
Segmentation relies on understanding what you offer, the problem it fixes, and the people to which it will ultimately be most useful. By understanding these main principles, you will be able to determine which groups of people most need your service and after, what are some of the best ways to target their specific profiles. This is the foundation of building client personas.
Using Research to Segment Properly
Anyone can draw arbitrary distinctions between groups of people— that doesn’t mean these distinctions will be useful to optimizing your outreach and advertising. As such, it’s important for you to conduct market research which allows you to develop different target audiences that have a meaningful connection to your product or service.
What this type of segmentation requires is an understanding of your target. We do this by looking at two main factors: who your audience is and what they need.
By understanding these two factors, we can build several audience segments and optimize outreach specifically to them through content and advertisements that speak directly to their needs. Below is how you can get that process started.
WHO: Building Your Persona
Personas answer the question: “Who is my target client?”
Each persona is a representation of a different market segment. As such, personas are built by collecting relevant information about your consumer and presenting it in the form of a profile.
Through your research, you want to understand the role of your target (such as a commercial consumer or a CFO), the concerns they may have about purchasing your product, and demographic information.
Once you have this information, it can be worked into a usable profile. To do this, give your persona a name, backstory, and even visual representation. Having a persona that is this detailed allows for you to not only understand your market, but it allows larger teams to have the same reference point they are looking to target.
WHAT: Needs-Based Segmentation
Our second method of segmentation looks at the needs of your ideal clients. While this is more challenging information to assess, it produced far better results than personas and demographics alone.
Need-based segmentation looks at the pain points of your prospective client— why they need your product or service and how it makes their life easier. The limits for this type of segmentation are truly limitless and entirely dependent on your market.
The best method of beginning the process is to place yourself in your clients shoes. If you offer a cloud-based data management solution, how will your product help your client streamline their workflow? What is unique about what you are offering that solves the client’s needs better than your competitors? Is your system more intuitive? More powerful?
Building Marketing Tiers
Understanding your audience is a work in progress. Over the course of your work, it’s common to revisit these questions often, tweaking your answer as you see which market segments respond the best to your outreach efforts.
As time goes on, this information is viewed together to separate your segments into different tiers. These tiers represent an overall assessment of your market by grouping them into categories of who is most (and least) likely to convert into a sale. The more likely a client is to convert, the more marketing resources you should put toward earning their business.
Generally, three tiers is enough for most companies to better organize which market groups should receive the most company outreach resources.
The lowest of your three tiers, this audience is usually less defined. As such, it serves as a blanket category for leads that may loosely identify with your target and have a potential interest in what you’re offering.
For instance, if you are offering a cloud-based data software, your tier 3 group may be anyone who needs large amounts of storage (such as video editors) and companies that have over 50 employees. These categories may try your product but ultimately have a higher chance of churning because their more specified needs are not being met by your offering.
The middle ground, tier two represents leads that will have a strong interest in your product or service and who could benefit from using it more directly than those consumers in tier three.
Maintaining the software example, clients in the second tier category might be local businesses, individuals who resonate with the message and values of your brand, and will likely have a longer lifetime value.
This tier represents those leads who ultimately become your longest lifetime clients. These are companies and individuals who, through your product, are able to find a complete solution to their challenges.
As such, these clients are not only unlikely to churn, they may begin to generate word-of-mouth referrals to other industry professionals. Thus, tier one clients not only generate a profit, they extend your community outreach.
As seen, focusing a majority of your efforts into clients that have tier 1 potential is a prudent marketing decision as the investment itself continues to generate revenue and increase your exposure without overextending your own budget.
Unfortunately, for business owners and professionals alike, taking the time to conduct proper marketing efforts is not always possible. This is where hiring external marketing aid can help grow your business.
Marketing Experts with Personas in Mind
At Sting, we take a multidisciplinary approach to marketing, taking professionals from design, development, content, and SEO, to bring you websites, articles, and social media presence all under one roof. By working as a team, we offer a coherent, cost-effective, and efficient marketing package for our clients to help them optimize their presence on the internet and get more business.