Target Marketing & Segmentation

Target Marketing & Segmentation

 

Bringing your customer into focus

 

Target marketing and segmentation are all about identifying potential customers and/or customer segments, then using this vital information to focus your sales and marketing efforts where you have the highest probability of success. It also allows you to make optimal use of your resources to ensure you reach these prospective customers.

However, doing this well requires a thorough understanding of who your customer really is.

Conventional approaches to segmentation “divide” the market using four main lenses: demographics, geographics, psychographics and behavioural elements. Although these lenses provide useful insights, they are not enough to properly hone your efforts.

This is important, because in a perfect world you would have an unlimited budget to market your business, find new customers and increase sales. You would be able to buy plenty of online and offline advertising, run in-store or on-line promotions to build traffic, or launch a pro-active public relations campaign to increase your product or brand’s visibility and awareness.

Unfortunately for most businesses, there is no such thing as an unlimited budget. However, we believe this is a blessing. All too often, an unlimited budget leads to a proliferation of “great” ideas that actually end up being a waste of resources.

It is with this in mind that SlightlySkew offers you guidelines on how to segment your market, maximise your resources and increase your probability of success:

 

• Understand the market dynamics

 

The law of Diffusion of Innovations is a theory that seeks to explain how, why, and at what rate new ideas and technology spread. Everett Rogers, a Professor of Communication Studies, popularised this theory in his book “Diffusion of Innovations”. For us, it is a way to understand how the market reacts, and provides valuable information on how to move an idea through the phases of adoption. In his book, “Crossing the Chasm”, Geoffrey Moore explains that a chasm exists between the innovators and early adopters of a market, and the early and late majorities. Crossing this chasm is critical if you want greater adoption of your ideas. It is almost fruitless to focus your efforts on convincing the early or late majority groups of the merits of your idea. These groups will never buy something that is not tested and proven by earlier groups. They are not interested in “imagining” the possibilities, the benefits and value of what you are introducing them to. The art is to create that “image” that represents the value you intend providing and again, only a few people (less than 18% of the total market) will want to “see” it. Once you have found these people – and it not easy – and they start using your product or service, you will cross the chasm.

 

• Define the minimum viable audience

 

In his blog, Seth Godin defines the minimum viable audience as “the smallest group that could possibly sustain you in your work. If you could pick the members of this audience, who would you choose? Their dreams, their worldviews, their energy, all up to you.”

He continues…

“If you could pick them and needed to delight them because you had no one else available, would your offering improve? If you had no choice but to ignore the naysayers (they’re not in the group) or the people who don’t think they need you or your work, would that force you to stop compromising and start excelling?”

He concludes with the following:

“Two things happen when you delight your minimum viable audience:

1. You discover it’s a bigger group than you expected.
2. They tell the others.

On the other hand, if you aim for mass (another word for average), you’ll probably create something average, which will not get you very far.”

 

• Understand your customer’s wants

 

People buy what they want. Then, according to Tony Robbins, they justify their purchase with a need qualification. The most successful way to identify your customer’s wants is to understand the situations they find themselves in, what they do to resolve these situations and what success means to them.

Understanding this basic information can make a huge contribution to the offering you take to your market. Your market will quickly catch on to the fact that you understand their issues, and will support you almost unconditionally.

 

• Create value

 

Your job as the business owner is to identify these situations – and they change continuously – and create solutions for them. This means adapting your offering to your customers’ changing wants and needs. What your customers define as a successful outcome for these situations will guide you in creating real value for them. By doing this, you keep your eye on your customer and not your opposition. You will immediately become the leader in your market.

 

• Search for additional markets

 

Many business owners and entrepreneurs are so focussed on their offering, and the perceived market they want to serve, that they miss other markets that could benefit from their offering just as much.

SlightlySkew recommends a continuous search for new markets – sometimes totally out of the ordinary and not what you would expect at all. In a study, the late Professor Clayton Christensen (Harvard Business School) found that there are people who, while commuting in heavy traffic, prefer a milkshake for breakfast instead of a bagel or a croissant. Makes you think!