Executive summary

• Audience segmentation allows you to group your target audience into multiple groups based on specific characteristics.
• By using audience segmentation, you can create more targeted messaging for your consumers that is more likely to resonate and better address their needs.
• To leverage audience segmentation effectively, it’s important that you build groups based on relevant data and what makes sense for your brand.
• You can use segmentation across channels to inform content production, promotions, and product offerings.

The truth is your audience is a diverse group of people, and the same message isn’t going to resonate with everyone. In fact, by not accounting for nuance in your marketing strategy, you could be missing out on your true potential for activating your target audience. By separating your audience by habits, personality, and more, you can take your marketing to the next level.

75% of consumers say they are more likely to buy from brands that offer personalized experiences. Audience segmentation makes personalization easy, allowing you to group your audience in ways that make communications more targeted and effective. Altogether, the art of audience segmentation will maximize your marketing potential and improve your reach. At PETERMAYER, we know how to leverage this art and put it into practice to better captivate brand audiences.

What is audience segmentation?

Audience segmentation is a strategy that allows you to identify subgroups within your brand’s audience so that you can target each one more directly with your messaging and build stronger connections. When you create subgroups, you do so based on specific criteria or qualifications.

Segmenting your audience allows you to refine your messaging and cater to each subgroup’s interests and habits, allowing your messaging to resonate better with different groups. Some of the benefits of audience segmentation include:

• More personalized communications
• Improved engagement and response rates with your messaging
• Less feedback regarding unwanted communications
• Higher conversion rates on messaging
• Higher ROI on marketing campaigns
• Greater potential for inbound marketing

Types of audience segmentation

There are many ways to break down your target audience into groups and categories. Understanding the different types of audience segmentation will help you understand when to apply each one and why some are more valuable to your brand than others.

Demographic segmentation

Demographics are data referring to the characteristics of your audience, and they play an important role in how you might target them with your marketing or communications.

Demographics include information like:

• Age
• Ethnicity
• Gender
• Income
• Marital status
• Occupation

The above characteristics are some of the most foundational information you can gather about your consumers. Demographics give the basis for who your consumers are, so you have a strong starting point when developing buyer personas and helpful information to segment from.

For example, H&M segments its audience by age to determine which products and promotions to offer to each group.

Psychographic segmentation

Psychographics are similar to demographics but focus less on characteristics you can see and instead on the ways your consumers think and the characteristics that make up their personality.

Psychographic information that you segment based on includes:

• Attitudes
• Aspirations
• Beliefs
• Lifestyle
• Interests
• Personality characteristics
• Values

Psychographic segmentation is an especially powerful tool as it gives you a deeper understanding of how you can influence conversions. Because psychographic information gives insight into how and why your consumers think and behave in certain ways, you can tailor your marketing to their personalities. For example, if you know that a consumer is more hesitant before they make a purchase, you can send educational resources to help aid them along.

Behavioral segmentation

Behavioral segmentation focuses on how your consumers act with relation to your brand and its services. This can help you cater to their current behaviors and predict their future behaviors.

Some criteria to use for behavioral segmentation include:

• Purchasing behavior
• How often customers engage with your brand
• When customers engage with your brand
• Which channels consumers use most
• What benefits they are looking for out of a product
• Level of customer satisfaction

Grouping customers based on behaviors helps you align your marketing to complement those behaviors. For example, if you know that a group of consumers tends to buy a product around a specific time each month, you can send a reminder email or offer a promotion to that group around that time to provide extra encouragement and build off that loyalty. This approach will be different for customers who buy more or less often.

Behavioral segmentation can be seen by brands like skincare brands that allow you to navigate their website based on your specific skincare needs. These brands may also offer coupons for similar concerns based on which buyers fall into each category.

Geographic segmentation

Geographic segmentation allows you to group your audience by location or region and can be a valuable tool for any brand. After all, geography can affect anything from weather to culture, so these segments may require different product offerings, communication styles, and more. Larger brands may group their audience by country or region, while local brands may be as detailed as segmenting by town or neighborhood. 

Geographic segmentation is used by brands like Starbucks, which tailors its seasonal drink offerings to the region and provides location-specific offers and promotions. Clothing brands also use geographic segmentation to determine when and where to release certain clothing lines based on weather and climate.

Technographic segmentation

Technographic segmentation focuses on grouping your audience into groups based on how they use technology. This form of segmentation allows you to determine which products or types of advertisements will resonate most with customers.

Some examples of technographic segments include:

• Which devices consumers use (e.g., a smartphone vs. a tablet vs. a laptop)
• What type of operating system they use (e.g., Apple vs. Android)
• The cloud services they use
• Preferred digital media avenue (e.g., social media vs. video streaming)
• How often consumers use e-commerce

Establishing segments based on the above criteria allows you to target each group differently depending on the types of ads or apps you may offer or promote. For example, a brand with an app only available in the Apple store will make sure to only target consumers with an iPhone.  

Firmographic segmentation

Firmographic segmentation is used by business-to-business (B2B) brands and is a strategy for grouping business customers based on their characteristics.

As a B2B brand, you may segment your customers based on characteristics like:

• Number of employees
• Industry type
• Location
• Business performance

As with business-to-consumer (B2C) brands, B2B brands can use certain criteria to tailor their marketing approach specifically to each group of clients. As a result, they can direct specialized products and offers that better fit the business needs of each segment.  

Maximize the reach of your marketing campaigns

Audience segmentation helps you make the most of your messaging. At PETERMAYER, we have the tools and skills to help you do it right.

How to implement audience segmentation

Effective audience segmentation starts with understanding your audience and then taking that understanding to build segments that make sense for your business. There are a few key steps you can take to implement segmentation effectively.

1. Perform data collection and analysis

The firm foundation for successful audience segmentation is data collection and analysis. Data collection both shows you what segments may exist in your audience and helps you understand buyer habits, allowing you to establish informed audience segments.

Choosing the proper data collection methods and standards will help you maximize your potential. Some data points to consider include: 

• Which demographics or psychographics use your products
• Which products are purchased and by which members of your audience
• The length of time between a consumer introduction and a purchase
• Where your buyers are located

You can collect this data by comparing your customer personas against purchasing metrics. You can also send out qualitative surveys to learn more about customer personalities and preferences.

2. Choose the right segmentation criteria for your business

Not every segmentation category makes sense for every business, so you must consider which segments you rely on most. For example, if your business is a clothing business, geography is likely going to matter more than a segment like the type of phone consumers have. 

Choosing the right segmentation criteria will allow you to strengthen the effectiveness of your message. Keep in mind that some segments may be more profitable than others, but you should still market to all areas of your audience.

To determine your segmenting criteria:

1. Consider who needs and uses your products and who your target audience is
2. Perform market research to identify trends amongst your consumers
3. Create detailed buyer personas for your brand
4. Define segments that have naturally developed amongst your existing audience
5. Analyze how much you may stand to gain based on current segments and their spending habits
6. Study how your competitors may segment their audience based on their promotions

3. Use tools and technologies for audience segmentation

The advancement of technology has made audience segmentation far easier. Using tools can help you speed up the process of segmentation, as certain tools can work within your consumer database to sort customers into groups based on their information, whether it’s specific demographics, psychographics, or another data point. 

Using tools and technologies for audience segmentation can help you easily segment existing customers in your database and automatically segment them as new customers come in. This strategy saves time for your marketing team and allows them to turn their focus elsewhere.

4. Integrate audience segmentation into your marketing strategies

Audience segmentation is only as helpful as you allow it to be. Once you have your segments established, you should find ways to put them to use. Some ways to integrate marketing audience segmentation include:

• Adapting email campaigns – Once you have established segments, you can create email communications for each one. Segmenting results in better open and conversion rates.
• Adjust promotions – If your different segments have specific interests or use various products, you can tailor your promotions accordingly and offer unique product promotions to each group.
• Create a variety of resources – Content like blog posts and videos can be helpful for your audience. Creating an array of resources for different segments increases the likelihood of drawing in and retaining consumers from each.

The impact of audience segmentation on inbound marketing

While audience segmentation can be great for pushing out new messaging, it can also be great for reeling in new customers by guiding your inbound marketing strategy, putting multiple tools in your tool belt.

Personalized content creation and distribution

Understanding your audience segments will allow you to create content that appeals to each group, whether it’s blog posts, videos, or resource guides. Then you can send out this content to each segment. This personalized content shows customers that you can meet their specific needs, builds brand trust, and makes them more likely to buy from you.

Enhanced customer engagement and loyalty

Customers appreciate personalization, and when your brand is able to personalize your messaging and promotions, you are more likely to keep your current customers onboard. Email communications and marketing materials that cater to consumers’ interests will keep them engaged so that they remain loyal to your brand.

Improved lead generation and conversion rates

Enhanced audience segmentation allows you to improve the quality of your leads, strengthen nurturing campaigns, and better pull them in. Whether it’s a social media campaign targeted toward a specific age group or a unique product release targeted toward a specific geographic location, using data-driven segments increases your ability to capture new leads.

Once you have these leads reeled in, you can use the art of segmentation to guide nurturing campaigns, avoid generalized messaging, and drive new conversions based on your leads’ unique traits and interests.

Increased ROI and marketing reach

70% of companies that used advanced personalization reported that it provided a 200% increase in ROI. Audience segmentation allows you to improve your marketing ROI by allowing you to only invest in campaigns that are likely to be effective. Without segmenting audiences, you are putting time and effort into campaigns that may not actually resonate or have the reach you desire.

Challenges and best practices for audience segmentation

Audience segmentation is a detailed process, and it comes with potential benefits and challenges. For success with this strategy, it’s important to consider the challenges you may face and how to overcome them.

Challenges

When first embracing audience segmentation, it’s common to experience a few challenges. Common challenges in audience segmentation include:

Overcoming data privacy and ethical concerns

Maintaining customer data comes with significant responsibility. Consumer data must be maintained in a safe and secure database to prevent the loss of consumer information. You should also be up to date with all regulations surrounding storing consumer data.

It’s also essential that you are transparent with your customers by communicating your privacy policy and making it easy to opt out of marketing materials.

Having too many or too few segments

When segmenting, you’ll need to toe the line between being too broad and too specific. Typically it’s better to err on the side of more generalized. Consider which segments will be the most valuable to you and study how much you stand to profit from each group.

If you are spending too many resources targeting too many different segments with not as much return, it’s better to narrow them down.

Best practices

When putting audience segmentation to work, you’ll need to stay on your toes to ensure you get the most out of it. You can do that by following a couple of best practices:

Continuously refine and optimize your segments

As with any marketing practice, refinement is key. You can always adjust your segments based on the performance of your marketing initiatives. If you don’t see the engagement you want, you can try segmenting based on different criteria or making your segments more or less specific.

Use multiple channels

Email lists are an excellent way to put the benefits of segmentation to work, but they aren’t the only tactic. Once you have your segments established, you can use them to craft communications across customer touchpoints, including social media and ecommerce sites.

Real-life examples of audience segmentation in marketing

Brands across several industries utilize audience segmentation to maximize the impact of their marketing. Directing attention toward some of these real-life examples of audience segmentation can provide insight into all the ways this strategy can be leveraged.

Hubspot

Hubspot is a master of audience segmentation. Hubspot uses firmographic segmentation for its B2B audience, targeting businesses of different sizes and industries with different marketing messages and solutions.

Hubspot also adjusts its email campaigns and content based on where consumers are in the marketing and sales funnel. This strategy allows the brand to create messaging that best resonates with each group and drives them to convert.

Starbucks

Starbucks is another great example of segmentation in action, as they use geographic segmentation to boost business with new drink or meal offerings based on local tastes, cultural events, and seasons. This segmentation helps create a strong sense of connection with their customers as they receive exciting menu items that are relevant to their tastes.

Airbnb

Airbnb uses segmentation to personalize its approach based on user behavior and preferences. Using information from past searches and interests, the platform is able to showcase recommendations tailored to each user. This strategy makes it quicker and easier for users to find what they are looking for, giving them more trust in the service, boosting engagement, and increasing conversion rates.

LinkedIn

LinkedIn uses firmographic segmentation to make advertising more effective on the platform. Advertisers are able to target specific industries, company sizes, job titles, and other criteria, enabling them to reach their chosen B2B audience more easily. This segmenting makes it easier for businesses to connect with relevant decision-makers and professionals, making them more keen on using LinkedIn in the future.

Embrace the art of audience segmentation

Maximizing the use of audience segmentation requires a strategic approach and the right tools. PETERMAYER can help you hone your targets.

Future trends in audience segmentation

Audience segmentation has become increasingly effective as technology and strategies have advanced, but this trend will only continue. The future has a lot in store for the art of audience segmentation, which will make businesses even more effective in grouping their audiences and targeting them effectively.

AI and machine learning advancements

Every day brings new advancements in AI. The improved use of AI and machine learning can make the segmentation process simpler, as the technology can help identify selected criteria amongst your list of consumers and then group consumers from there.

These advancements will remove even more steps from the segmenting process and save time for your current staff. This saved time allows them to direct their attention elsewhere, like focusing more on reaching out to consumers and crafting new campaigns.

Hyper-personalization and dynamic content

The customer experience is becoming increasingly personalized, making audience segmentation even more valuable. Dynamic content is generated based on a user’s interests as they visit a webpage. Dynamic content will reach each consumer in a way that resonates with them, so having audiences grouped into accurate segments will be key.

Cross-channel integration and omnichannel marketing

With omnichannel marketing, consumers receive a consistent experience across all channels, whether they interact with your brand through an app or in-store. As time progresses, brands will only get better at using audience segmentation to target consumers across multiple channels depending on their behaviors and preferred technologies.

Implement audience segmentation strategies for your business

Audience segmentation is an invaluable tool that allows you to group your target audience by special characteristics, increase conversion rates, and boost customer loyalty. Still, segmenting takes a careful strategy and detailed processes. 

For assistance in understanding and properly segmenting your audience, you can turn to PETERMAYER. We use research, data, and ingenuity to help brands navigate change, using creative solutions to reach new and existing target audiences.

Contact us today to schedule a discovery call and learn how we can help you engage with your audience in meaningful ways.