Marketing Segmentation - Why is it Important? | The Typeface Group

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Why market segmentation is important in corporate communications

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Jude Peppis

Market segmentation is nothing new. Well, at least, it shouldn’t be. Gone are the days when your company’s key messages should be the same no matter who you are speaking to and what marketing platform you are using.

Although all companies will have a broad target audience in mind, market segmentation is about drilling down even further.  It is about finding out who you are specifically reaching, speaking to each group individually and delivering the content which will resonate with them.

For example, online retailer ASOS is broadly aimed at 20-somethings. But, this could include a whole host of different people including most obviously, men and women, but also students, people in employment, parents, backpackers or people from different backgrounds. A company’s marketing materials needs to resonate with all of these people across every touchpoint. So, it is not a one-size-fits-all approach.

There are two rules of thumb when it comes to why marketing segmentation is important:

  • The bigger the company is, the bigger the potential audience is. So, the more important it is to segment that audience for marketing purposes.
  • The less specialist or niche your product is, the bigger your potential audience is too.

However, the reasons why market segmentation is important should not be ignored by companies of any size, particularly if a company is looking to grow or to reach out to new audiences.

In my former role, when I was part of the digital marketing team for Battersea Dogs & Cats Home, the charity recognised just why market segmentation is important. It undertook a project to define who, when and how they were talking to people. This resulted in five different audience profiles, and every piece of marketing collateral was produced with these audiences in mind. This went down to the finest details including whether they want to receive information online or offline, what tone of voice they may respond to and what times of the day they are likely to be most receptive to marketing messages. (FYI, lots of studies have broadly said that the best day to send an email campaign is a Tuesday.)

Market segmentation does not have to be a large-scale project. It should, however, be at the forefront of your mind when putting together any company collateral.

Here’s an example:

You’re sending an email campaign to your entire, GDPR compliant, list. But, on that list, you have customers who regularly purchase from you, people who haven’t engaged with you for a few months and new customers who have just joined your mailing list. Most email service providers will allow you to segment that list so you can send separate campaigns to each of those groups. Yes, it takes more time, but it’s worth it. Segmented email campaigns get 14.31% more opens and 100.95% more clicks than non-segmented campaigns.

There are a lot more reasons why market segmentation is important beyond impressive marketing statistics though:

  • Personalised content makes customers feel valued and appreciated.
  • It closely matches the customer’s needs and choices – so the chances of sales or conversions are higher.
  • It allows for more accurate planning, sales predictions and ROI.
  • Identifies your most loyal customers and who are most engaged with you.

Market segmentation is not just about email marketing. The reasons why market segmentation is important also extend to social media. The most obvious way of doing this is through paid advertising, which will place your content right in front of your target audience on platforms including Facebook, Instagram, LinkedIn and Twitter.  Some of these platforms do allow you to target specific audiences without throwing money at it too, such as Facebook’s Group function and Twitter lists.

Consider having different social media feeds for each strand or location of your business so content can be tailored accordingly. This is also something which I did at Battersea Dogs & Cats Home, with Twitter accounts for rehoming, public affairs and press as well as Facebook pages for each of the charity’s three branches. However, if you are considering doing this, make sure you have the time to run a number of accounts and enough content to fill each channel too.

Data, data, data

There is no denying that market segmentation takes time and effort to pay off. So, to ensure you have valid justification as to why market segmentation is important for your business, monitor your results. Use data from your email service provider, Google Analytics and social media insights to ensure that it is working for you. When correctly executed, market segmentation should see your stats shoot up. This shouldn’t just extend to those vanity metrics, but also positively impact on brand awareness, web traffic, conversions and sales.

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TIP: Regularly review how your segmented marketing is performing and test, test, test again if needed. Most email service providers will let you do this, and you can run tests yourself on social media with a sample audience before sending out en masse.

In today’s competitive digital marketplace, the reasons why market segmentation is important are plentiful. It will take time and effort but, ultimately, it is fun! It provides a great opportunity to learn about your audiences and what really makes them tick. Then, it’s a case of handpicking what they will like and delivering it to them in the best way possible. Everyone likes to feel special and a personal approach from a company of any size won’t go unnoticed by a potential customer.

Not sure where to start?

The Typeface Group can offer you expert advice when it comes to email marketing and targeted social media. Contact us to find out more. Or, visit our blog for more information on how to make social media marketing work for you.

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