It’s important to know why you should segment your market, especially if you’re selling a variety of products that could be used by different demographics.
Here we’ll show you why it’s important and how it’s done:
TRANSCRIPT
In today’s session, we’re going to look at market segmentation. In other words, how you can segment your market to target the right people with the right message in the right way. This is how we’ve managed to grow our business consistently over the years.
Now, I’d like to tell you a little bit of a story about my background. I started my first business when I was 18 years old, and I was doing property maintenance. In short, I was fixing sash windows. With modern windows, you may not necessarily know what those are. But let me tell you, it’s a messy job. It takes about 20 minutes per window to fix. I was earning good money as an 18-year-old doing this.
But one of the things that I did was applied to the Princess Trust because I read that they’d got grants and I’d like to get a grant. But they also gave me a business mentor as well, a guy who had been in business, and was quite successful, and had a very nice car.
Know who you’re selling to
One of the things that he suggested was that you should understand who you’re selling to. You need to do some market research.
Now, you may have heard the term, market research, before and there’s an awful lot of images that come to mind — people chasing you down the street asking you to fill in a questionnaire, or you get email surveys and stuff like that.
Effectively, all my mentor was doing was trying to make me think about the most ideal clients for my business. This is because, when you work out who your ideal clients are, you can stop attempting to sell to people who, quite frankly, are never likely to buy from you. I’m not saying that a small percentage won’t, but if the overwhelming majority of people in a certain sector are not going to buy from you, why would you want to spend time and effort marketing to them?
Different markets require different approaches
Now, fast forward quite a few years to where we are today, and one of the key things that we do in our market is that we have a very clear idea of who we sell to in our website design business and also in my training business as well. They are two very different markets.
Why You Should Segment Your Market
With our website design business, we sell to very small businesses and the self-employed. With my training business, I sell to medium-sized businesses. So what we say to those particular types of businesses are very different. With the self-employed and the very small businesses, we’re looking at offering a return on investment with their websites. With the training business, we’re looking at selling effective training that will make a difference to the productivity of the workforce.
So the messages are very different because they are completely different segments of the market. Yes, they are completely different products, but we wouldn’t talk about return on investment trying to sell websites to bigger businesses. We would talk about something else. But small businesses rely on their investment in a website having a return on investment.
So what we’ve worked out is that our message to our target market needs to be tailored to what it is they are after from a website, which ultimately is a marketing channel that helps to generate sales.
Key demographics
And you should be doing something similar — to work out a demographic. That could be based on a whole wide variety of different factors:
And here’s a quick list of some common demographics to think about:
- It could be age. Do you sell to elderly people? Do you sell to young people? People in the middle?
- It could be where they’re located? Do you sell to affluent areas or do you sell to not-so-affluent areas? Do you sell just around where you are based or is it nationwide or perhaps even worldwide?
- Do you sell according to gender? I had a discussion with a friend of mine who’s hoping to sell soaps and bath bombs. Most people who buy soaps and bath bombs tend to be female. So a lot of her marketing needs to be female oriented, simply because that’s a demographic, a way of splitting up your market and a way of making sure that you’re not aiming your marketing at people who aren’t likely to buy.
- It could be to do with race if you sell certain things to certain cultures in this country. For example, saris are big in Leicester. Not many people who aren’t Indian or of Indian origin buy saris. It’s a fact. So why would you pitch any of your marketing or much of your marketing at people who are not likely to buy saris?
- It could be size of business. Small businesses have different requirements and budgets to bigger businesses.
- You could base it on income. Mercedes and Rolex don’t target people who have very low income. But cut-price retailers do.
The list goes on. It just depends on what you sell and to whom. But if you more accurately define your market, it leads you on to be able to define your message and then the marketing channels which you use to get that message across. That really is the crux of Why You Should Segment Your Market.
If you sell to elderly people, for example, advertising on the internet may not necessarily be a particularly good fit. But postal marketing might well be a good channel. And that’s a classic example of where your marketing channels and your marketing message fits your marketing demographic.
Don’t be afraid to say no if they’re not a good fit
Now, I can’t urge you enough to segment your market. We decided very early on in our website design business that we were going to sell to tiny businesses and the self-employed, and we have an offering just for them. In fact, when bigger businesses come to us, we usually pass them on to someone else, simply because it’s not what we do, and it’s not what we want to do. It’s not a market that we want to operate in.
You could argue that turning away business is foolhardy. But they key thing is that we understand what small businesses want from websites and we can leverage that. With bigger businesses the rationale is different and we don’t want to get into woolly motivations. Neither do we want to go through layers of management to get decisions, this is common in bigger businesses.
So the key message for this is, if you segment your market, you know who you’re selling to, and you know what they want, and you know enough about them to understand what it is they buy, and why they buy it, and how much they buy, and how much they spend on it, etc., the more you know, the better armed you are to be able to pitch your marketing at that group to get maximum response.
And this is the key; this is why you should segment your market:
Do you want to waste money on people who are never going to buy or are highly unlikely to buy? You should only spend time, effort, and money on people in your target market who are most likely to buy, who are a best fit for you, your products, your business and your message. The better you are at this, I promise you, the better your marketing will become.
So I really, really hope that’s been useful. If you like what we do on this, then please subscribe to the YouTube channel. The link is up there. But it’s only ever good information if you go and put it to some good use. So thanks for watching. I appreciate you watching, and bye for now. iate you watching, and bye for now.
