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Home > Blog > Digital Marketing > PPC >

4 Types of Marketing Segmentation Examples to Lift Your ROI

Imagine opening an email that doesn’t align with your interest. You’d probably use the delete button. Well, that’s why marketing segmentation is important. Marketing segmentation helps you send messages that resonate with your audience.

marketing segmentation examples

This way, you’d most likely generate more sales and leads for your business. This guide unveils lots of marketing segmentation examples. And that would help you get a good grasp of what marketing segmentation is.

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What Is a Market Segment?

Market segmentation involves categorizing your target market into smaller units that share similar traits. These traits could be behavior, personality traits, income, age, location, needs, or interests.

Using these segments, you get to optimize your advertising, marketing, and products. In the long run, it would help boost your sales efforts.

With segmentation, you get to create various strategies for your different customer types. And that will be highly dependent on how they see and value your product or service offering. Furthermore, segmentation helps you create personal messages that resonate with your target audience.

Why Is a Market Segmentation Strategy Important?

Market segmentation helps you get a good grasp of your target audience and customer persona. It also helps you identify the right market for your product or service offering.

As a business owner, market segmentation helps you launch more precise advertising options. Aside from that, you get to create customized content for various audience groups.

Let’s say you have a new brand for dog food, you should split your audiences into various segments. The first segment is for potential customers who do not have dogs. Another segment could be for people who have (or like) dogs.

Moving on, you get to split the second segment. And the splitting will be dependent on the kind of dog breeds they have. After that, you get to show ads that are suitable for their dog breeds.

What’s more, you can use market segmentation to show your audience dog content. But that will be dependent on whether they have (or like dogs).

Market segmentation helps in targeting the right people, in the right way. It’s much better than targeting your audience with generic content. This way, you get to boost your ad engagement and also generate better results.

How Do Market Segments Work?

A market segment is a category (or unit) of customers sharing similar interests, likes, and dislikes. The customers could be of various types. They could be individuals, organizations, businesses, or families.

A typical market segment responds almost always the same way to a marketing promotion, plan, or strategy. By grouping customers into segments, you get to easily forecast the behaviors of customers within the same segment.

Simply put, the market segment involves separating customers into sub-groups. And each sub-group shares similar traits. To be called a market segment, customers have to share these three characteristics.

  • Customer needs of the same segment have to be homogeneous
  • Each segment has to be unique from the other
  • Each segment must have a similar response to a market trend.

Market Segmentation Types

Demographic Segmentation

With demographic segmentation, you get to segment your customers using characteristics like;

  • Gender
  • Age
  • Family status
  • Income
  • Ethnicity
  • Education

If you’re catering to various customer niches, then you’re better off with this segmentation type. With this segmentation, you get to easily tailor your message to fit your audience. Tailoring your message could be as little as broadcasting the message in the local language of the region.

Psychological Segmentation

With psychological segmentation, you get to pay attention to the thought process of your customers. What do they think, and what appeals to them? You should keep a close eye on customer traits like;

  • Hobbies
  • Lifestyle
  • Interest
  • Values

If you’re focused on how your customers think, then you’d have to settle for this option. This way, you get to target customers based on what matters the most to them.

Geographic Segmentation

This segmentation type focus on groups of prospective customers based on where they live.

Geographic segmentation is the practice of dividing your audience based on geographic region, from country right down to postal code. It is used to target products or services at people who live in, work in, or shop at a particular location. This way you can benefits like;

  • Targeting appeals to the needs and wants within a geographic location
  • Easy to measure and analyze, and cheaper as well
  • Allows you to target location-specific keywords and demands
  • Takes into consideration the way people communicate within regions and communities.

Behavioral Segmentation

This segmentation type focuses on how people interact with your website and business. You should look out for audience traits like;

  • Online browsing pattern
  • How they interact with brands
  • Buying pattern
  • What they buy the most.

Most business owners prefer psychological and behavioral segmentation. After all, these segmentation types help in the creation of more personalized content for the customers.

Benefits of Market Segmentation

1. Better ROI from Marketing:

About 77% of marketing ROI is generated from segmented, targeted campaigns. These campaigns typically generate the most sales.

2. Set Your Omnichannel Strategy:

The insights gained from marketing segmentation will help you come up with an omnichannel strategy. This way, you get to easily address your customer’s needs. For instance, if you’re targeting Gen Z, you’ve got to focus on channels where these audience types are.

3. Build Customer Loyalty:

Market segmentation helps you build personalized journeys for your customers. Personalizing your marketing messaging will help boost loyalty among your audience.

4. Reach New Markets:

Segmentation helps you widen your market reach. You also get to identify a gap in the market. For instance, the Canon brand attracted a large customer base by selling cameras to children who don’t have smartphones.

5. Reduce Customer Acquisition Costs:

Market segmentation helps you gain more insight into your customers. This will, in turn, help you launch more effective marketing campaigns. For instance, the Metlife brand came up with an $800 million saving plan. And that’s after they must have studied the behavioral patterns of their market segment.

6. Build Better Products:

By having a good grasp of who your target customers are, you get to create a better product or service offering. In the long run, you’d be meeting the needs, desires, and expectations of your customers.

7. Higher Quality Email and SMS Leads:

Tools like the opt-in form will help you generate more SMS and email databases.

8. Drive More Revenue from Email Marketing:

Segmented email campaigns are a sure way of boosting your open rates and revenues.

Market Segmentation with Examples:

Marketing segmentation examples are everywhere. Regardless of how big your business is, here are some marketing segmentation examples to study.

Technographic Segmentation:

Customers in this segment are grouped based on the kind of technology they use. The way they interact with their technology is also put into consideration.

For instance, when launching a new product, you could target early adopters of new tech. Furthermore, you can target customers based on the device they use for online shopping. For instance, customers who use Safari can be shown Apple products.

Generational and Life Stage Segmentation:

Generational segmentation uses demography to group customers. And it can be dependent on generations like Gen Z, Millennials, or Boomers.

There is an option of segmenting customers using factors like home ownership, marital status, and the number of offspring.

For instance, the Bank of America uses life stage segmentation. That was accomplished by using the customer’s Family Life Banking program to identify their life stage circumstance. And most times, it’s done during the signing-up process. After that, customers were directed to a microsite designed for their segment.

Transactional Segmentation:

Customers are grouped using their purchase history, and interaction with the brand. These could be;

  • Date of the recent order
  • Average order value
  • Channel for brand discovery like organic or social media
  • The total number of transactions.

Firmographic Segmentation:

Unlike other market segmentations that are for D2C brands, Firmographic segmentation focuses on B2B companies. With Firmographic segmentation, B2B companies get to easily launch impactful campaigns.

Firmographic segmentation involves classifying and analyzing B2B customers based on their shared characteristics. It’s similar to demographic segmentation that’s found among D2C marketers. To create Firmographic segments, you need to consider these eight factors.

  • Location
  • Industry
  • Status
  • Company size
  • Performance
  • Sales cycle stage
  • Executive title
  • The number of employees.

How to Create a Marketing Segmentation Strategy?

Marketing segmentation is typically divided into four — geographic, psychological, behavioral, and demographic segmentation. However, there are other strategies to help you create marketing segmentation.

  • Some businesses use the ‘transactional worth’ of their customers to segment their market. How much can the customer spend on their products? Determining the transactional worth of the customer is simple. Take a look at the customer’s purchase history. How many products have they bought, and how frequent is the purchase? The value of the item they purchase also plays a role.
  • B2B companies may segment their customers using Firmographic segmentation. And that’s similar to demographic segmentation used by D2C businesses. The segmentation focuses on the characteristics of the company (or customers) involved.
  • Companies may segment their customers using generation. This segmentation could be based on Gen Z, Generation X, Millennials, Silent generation, or Baby Boomers. Customers born within a generation are believed to share similar traits, behaviors, beliefs, and preferences.
  • The location of the customer’s residence can be used for segmentation. You can also consider key life events like going to college, marital status, and the number of offspring. Customers’ needs are dependent on the stage of life they are in. For instance, a fresh college student will need furniture, while new parents will need baby food.
  • Customers’ needs are also dependent on the season of the year. Holidays like Christmas affect customers’ purchasing behaviors.

How Does PPC Signal Help You Manage and Optimize Your Google Ads Campaigns to Segment Your Market?

If you’re running PPC campaigns, you have to see if your campaign is generating good results. But managing multiple campaigns from a single account is tough. And that’s why you’d need tools like the PPC Signal.

The PPC Signal helps you keep a close eye on your campaigns. This way, you get to identify what’s working and what’s not. The tool uses artificial intelligence and machine learning to generate automated signals. You get to identify any anomaly and quickly fix it. It helps you save more time and resources in the long run.

For instance, the PPC Signal can help you keep a close eye on your campaign clicks. Clicks show you whether you’re attracting customers or not. To monitor your clicks, you have to navigate to the PPC Signal dashboard and select the click metrics.

After that, an automated signal will be generated on your screen. This way, you get to figure out what’s wrong with your clicks and other campaign metrics.

There is the option of generating more insights about your campaign. You can do that by using the Explore button.

marketing segmentation examples

From the signal, you get to see an increase in your clicks without a corresponding increase in your conversions. Therefore, you have to work on your landing pages and call-to-actions. To get more insights about the data, click on the Explore button.

marketing segmentation examples

Something is wrong with a campaign that generates 180 clicks and 3 conversions. Your job is to figure out the anomaly and fix it. You could start by adding relevant keywords to your landing page. This way, you get to optimize your campaign for improved performance.

FAQs:

What Are the 4 Main Foundations of Marketing Segmentation Examples?

The primary foundations used in determining a customer’s profile are;

  • Demographic
  • Psychographic
  • Geographic
  • Behavioral

These factors are used in segmenting customers into various categories.

What Is the Purpose of Marketing Segmentation?

Marketing segmentation is used in categorizing customers into various units. This way, businesses get to have a better understanding of the customer’s behaviors, needs and wants.

How Can Market Segmentation Increase Profit?

Market segmentation helps boost the benefits customers get from your products or services. It helps the business owner understand the customer’s needs and fulfill them.

What Are Some Marketing Segmentation Examples?

Common marketing segmentation examples are behavioral, demographic, psychographic, and geographic.

Wrap Up:

Marketing segmentation is a process of categorizing customers into various segments (or units). Customers in the same segment share similar traits or characteristics. Businesses could categorize customers using characteristics like demographic, behavioral, psychographic, and geographic traits.

With marketing segmentation, you get to fully understand the needs and wants of your target customers. You also get to work towards fulfilling these needs and wants. Marketing segmentation also helps in launching targeted campaigns for your audience.

There are various marketing segmentation examples like Bank of America. The organization segments its customers using life stage segmentation.

When it comes to running campaigns, you’d need a tool like the PPC Signal. The PPC Signal helps you keep a close eye on all sides of your campaign. This way, you get to figure out what’s working and what’s not.

Now you know the processes that go into marketing segmentation, what traits will you use in separating your customers into various segments?

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