Customer segmentation is a marketing term used to determine the shared characteristics of a brand’s most profitable customers and which segments have the most growth potential. The shared characteristics of these groups are based around common interests, economic status, race, age, and location profiles, and even similar lifestyle and behavior choices. Advertisers tend to see a positive response and get the most Effective advertising through customer segmentation.
While this term has been around since advertising began, the concept of hyper-segmentation has grown since the 1980s and the emergence of digital communication. Cell phones, Social media and working from home have increased the amount of data that marketers have at their fingertips to define and understand their target audiences. However, often it can still be hard to reach. In some cases, narrow, hard-to-defined cluster segments can be most effectively reached through existing media types that already have a pre-existing mode of reaching a specific niche audience. Magazines and Newsletters exist for this very reason and are often the most effective way to reach small local audience. When coupled with digital advertising, direct response print campaigns and radio advertising can be the most cost-effective way to drive traffic to websites and brick and mortar store locations.
How do Identify a customer segment?
There are a number of ways advertisers can target a customer segment of people. Namely this is done based on the characteristics that make them ideal clients. The most successful way is to pinpoint the media consumption behaviors that the audience you are trying to reach has. Most of the time, customer segments have specific behaviors that they repeat. This includes what media they use and how they are influenced.
Simultaneous media streams and constant multi-tasking leave audiences inundated with ads. Now more than ever, audiences are caught in a conundrum. Not only taking in large amounts of media. But also trying to be more mindful about what they are watching. This means taking into more consideration who, why, and how they are exposing themselves to new media sources and ideas. Traditional media often becomes an outlet where people are willing choosing to turn towards versus away from.
While people do love novelty, they usually prefer what is familiar. This is especially true in times when there are a lot of unknowns. For the majority of advertiser customer segmenting is a productive way to create more profits. This can be done by focusing on their existing customer base and continuing to cultivate the values that are important to them. Audiences tend to vary a great deal. Difference begin to emerge based on location and demographic factors. Many case studies have shown that it can be worth while for advertisers to spot place locally. The reason for this is to generate connection with their audience base and build in that relationship long term.
How to place advertising Effectively through Customer Segmentation
One of the easiest ways to define a audience segment is to begin looking at their behaviors. For instance you may want to consider how your audience participates in media. You can then choose to place your advertisements in a way that are consistent with those trends. For instance each generation tends to prefer specific types of media. They also follow certain behaviors when consuming it or when searching for products or services on line. In other cases targeting a specific group might mean promoting your product or service to a specific industry or profession. This can also mean participating in trade shows or advertising at a location possibly on a bill board or at a business like you often see outside of schools.
For more information about effective advertising through customer segmentation or advertising by niche audience see this additional information.