Market segmentation is a foundational part of providing personalized experiences to specific audiences based on various characteristics or criteria. The basis of market segmentation is to provide businesses and organizations with a greater understanding of the kinds of customers buying their products or services. By learning more information about segmented portions of your company’s customer base, your marketing team can develop more effective marketing materials that are specifically targeted toward your various segments.
Market segmentation and targeting can help a business focus marketing efforts to make them more personalized and targeted and therefore more likely that your target audience will engage. By segmenting the broader audience, marketers can tailor specific messaging initiatives or marketing campaigns to certain segments of the entire customer base. This can be particularly beneficial for companies trying to broaden their customer base while maintaining existing healthy customer relationships. Customer loyalty is generally not granted or withdrawn whimsically; customer loyalty is typically more abundant when businesses invest in the quality of their customer relationships with techniques like segmented marketing.
Conversely, unsegmented marketing is when the whole market is considered to be the ‘target’ market. Or, in other words, there are no categories to differentiate between groups within the market. In fashion, they call this approach a one-size-fits-all, but for many organizations this approach is inefficient. Companies can be these behemothic, sprawling international enterprises with dedicated customers all over the world. Asking their marketing team to develop a singular approach to reach all of their customers is not only impractical, but it also doesn’t make good business sense. For this reason and many others, a segmented marketing approach is the preferred method for many companies around the globe.
Some segmentation metrics are better for developing categories than others. For instance, if many of your organization’s customers belong to a particular age group or generation, it may be alienating to potential new customers if your segmentation initiatives lead to generation-specific marketing strategies. Instead, segmentation can be utilized to better understand the diversity of a business’s primary consumer base while learning effective customer engagement strategies that can be implemented moving forward.
Without a decent segment marketing tool, the market segmentation process can be challenging and potentially overwhelming. There are too many variables, internal, and external factors for human beings to be able to quickly and effectively segment audiences meaningfully. A single individual or a small marketing team may be able to come up with a handful of customer profiles but it requires the implementation of state-of-the-art software to truly segment an audience rapidly and in a way that can provide businesses with meaningful insights.
There are numerous market segmentation tools and techniques marketing teams might utilize in order to understand more about target audiences. Methods of market segmentation may differ from company to company, and there are several different types of segmentation that can help better define a target audience, but what are the 4 types of market segmentation?
Demographic segmentation - As its name implies, demographic segmentation relies upon demographic information like age, gender, marital status, income, education, nationality, etc. This type of segmentation is particularly useful for companies trying to better understand the characteristics of their primary customer bases. If your business offers products or services to specific age groups, this type of segmentation could be highly informative and helpful for developing better engagement strategies.
Behavioral segmentation - This category exists to identify certain audiences based on patterned behavioral traits. Behavioral segmentation is such a vital metric because it helps identify the most engaged audience members and potentially enables businesses to develop effective strategies to keep these individuals engaged and returning to your business for additional products or services. Behaviors may include buying habits, how knowledgeable an individual is with your brand or your brand’s products and services, as well as how frequently they utilize an app or log into your company’s website.
Geographic segmentation - For businesses operating in specific regions or nations, geographic segmentation can offer vital information about audiences in areas where your company’s products and services are available. Geographies can be segmented broadly, by continent, nation, state, or province, and they can also be segmented locally – by region, city, municipality, or even postal code.
Psychographic segmentation - Oftentimes conflated with behavioral segmentation, psychographic segmentation seeks to identify subsections of an audience based on their psychological traits and various idiosyncrasies. While not exactly behaviors, psychographic categories might include things like personal beliefs, lifestyle choices, personal values, social status, political inclinations, and other opinions and activities. This method is considered distinct from behavioral segmentation because it identifies specific motivations that may drive various behaviors instead of simply measuring the behaviors themselves.
The purpose of market segmentation is not to alienate or segregate, but rather to help marketing teams develop more personalized marketing campaigns that are more effective at achieving business objectives like improving profitability and revenue streams. In order to meaningfully reach audiences where they are, organizations need better customer data and greater analysis capabilities of that data.
As we touched on in the previous section, there are lots of different types of customer segmentation. And because the process can be highly complex and involved, many organizations have invested in customer segmentation software to help them prepare their customer segmentation models. There are a variety of customer segmentation tools available on the market, but not all are created equally and some might be better suited to your organization’s needs than others.
Customer data platforms exist to collect data from hundreds or thousands of sources and provide a singular view to allow for deeper segmentation and the development of more personalized marketing strategies. Additionally, customer data platforms eliminate the need to utilize data silos which can be clunky and cumbersome to access – especially between multiple departments. By implementing a singular platform, marketing teams can spend more time preparing marketing materials and less time futzing with technology and relaying information to other departments.
Customer segmentation tools exist to provide marketing teams with more relevant and personalized information about their target audiences. Marketing teams that have a firmer understanding of their segmented audiences are likely better prepared to devise effective strategies for those particular segments. Without a robust segmentation process in place, marketing teams have little way of knowing whether or not their campaigns are effective.
When it comes to implementing an effective customer data platform, customer segmentation is only one component of a much broader goal – improving customer engagement and driving revenue. Customer segmentation would not be possible, however, without swaths of accurate and up-to-date data, which is one of the foundational ingredients in a beneficial customer engagement process. One of the best customer segmentation tools available on the market today is Twilio Segment, which we will discuss in greater detail in the section below.
For businesses interested in coordinating better customer interactions throughout the customer journey, Twilio-Segment can provide your customer-facing teams with all the relevant and necessary information at a moment’s notice. Segment CDP (customer data platform) provides businesses with everything they need to collect, analyze, and activate your organization’s invaluable customer data. Segment software and Segment integrations can help businesses develop appropriate and effective customer segmentation practices while improving customer engagement initiatives across the board.
Segment analytics provide marketing teams with relevant insights and customer data to provide better engagement opportunities in the future. Segment can collect events from the web and mobile apps to provide businesses with a more complete data toolkit so everyone in your organization can access the information housed in a central location in the Segment database. With a more complete view of the customer from every vantage point, your organization is better prepared to develop effective strategies and campaigns while unifying your customers’ touch points across every channel and on every platform.
For unified, personalized customer experiences, there are no other omnichannel solutions quite like Segment that can provide real-time data from target audiences to improve your marketing team’s future engagement strategies. Additionally, some of the world’s largest companies and most well-known startups trust Twilio-Segment to help improve existing customer engagement initiatives and some of these businesses experienced a sharp increase in revenue following a three-month customer messaging pilot program.
Twilio-Segment provides a single platform with multiple views for marketing teams, contact center agents, product teams, and developers alike to ensure that everyone is on the same page and has access to the information they need to make better-informed decisions. For customers, Twilio-Segment enables businesses to break down outdated data silos to allow for greater personalization of customer engagement throughout the entirety of the customer journey.
Stitch is a leading Twilio + Segment consultancy service for marketing teams of all sizes. Stitch can provide businesses with MarTech optimization, road mapping, data segmentation, and personalization so your marketing team can trailblaze a path toward achieving your specific business objectives. For organizations looking to utilize Twilio-Segment to support their own customer engagement strategies, Stitch can help build solutions from data migration to data infrastructure and configuration. And with unparalleled knowledge of Twilio and Segment, Stitch can also provide marketing teams with ongoing support, optimization recommendations, and campaign management and/or analysis throughout the entire process.
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