Eating the Elephant - One Segment at a Time

July 31, 2012 Leigh Nightingale

Why is customer segmentation so often the elephant in the room when it comes to marketing strategy? While it takes some thought and time to put together, small businesses can gain a competitive edge quickly by focusing their marketing efforts (and dollars) on specific market segments. Target your offer to those customers you know are more likely to purchase than those who are not. Remember, like attracts like, so if you have a group of prospects that look like or behave in similar ways to your existing top customers, they will have a higher propensity of becoming a top customer in the future.

Some characteristics to consider when developing your customer segments include:

- Age, gender, income level

- Geographic location - For a small business such as a pizza shop, for example, its target market may be all residents within a five-mile radius of the shop's location. The shop owner can target this market by mailing a special offer to all homes and businesses within this radius or within specific zip codes.

- Life stage - ie: college students, retired couples, new parents, newly married, professionals. By understanding which life stage your customers are in you will be better able to target your products/services more effectively.

- Purchasing behavior- Have they bought from you before? What is the average purchase amount? How often do they buy from you? How much pre-sale and post-sale support do they require? What are the common companion items purchased?

Don't let Customer Segmentation be the elephant in your marketing plan - just nibble away at it one segment at a time.

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