Marketing Segmentation and How to Use It

Understanding your audience will be a key factor in your campaign’s success. You need to know how they’ll respond to your ads and how different demographics engage, and this is where segmentation for marketing can prove useful.

The idea of splitting up an audience might sound counterproductive. After all, if you’re separating people into different groups you’re going to be running more ads. However, this is actually preferable and in this post we’ll be explaining why you need to start using marketing segmentation.

What is Segmentation for Marketing?

In the simplest of words, marketing segmentation is when you take your audience and split them into groups based on demographics or behavior. One way you can do this is by creating groups around ages. If ages 18-25 respond better to Facebook Video Ads than ages 36-45, running different ads for each group would gain better results.

Age isn’t the only factor you can base your segmentation on. Segmentation for marketing can also be done around interests, location, gender, and various other traits. There are 4 different types of marketing segmentation that are used, but we’ll get to that shortly.

Benefits of Marketing Segmentation

This list could go on and on because there are so many benefits to segmentation for marketing that it should be considered a core part of your targeting strategy. Rather than give you an exhaustive list, here are our top 3 benefits.

Relevant Ad Targeting

Segmenting your audience based on where they are in your sales funnel gives you a means of showing your audience relevant ads. Think about it: you don’t have to warm up someone at the bottom of your sales funnel, so why show them a “warming up” ad? Likewise, if one group has terrible engagement with your ads, you could segment them and run a different set of ads that they might respond better to.

Improved Ad Performance

Following on from above, you’re going to improve ad performance and spend your budget more efficiently. Going back to our previous example, there’s no point in running Facebook Video Ads for ages 36-45 if they’re barely engaging with them. Segmenting age groups allows you to continue getting great results from ages 18-25 while testing different ads with other age groups, hopefully finding out what ad types work best with them.

Better Audience

You’re going to have more control over your audience. Who you target and how you target them will be the epitome of your campaign’s success. Again, you get to show certain groups of people ads that are relevant to where they are in your sales funnel. If there are any weak groups, you can cut them out of your targeting and focus on other groups.

These alone should be enough to convince you to try out segmentation. But, if that’s not enough, there’s also the benefits of customer retention, targeted communications, and you’ll have a bigger share of your market.

Types of Segmentation for Marketing

When you’re planning segmentation for marketing there are various types to consider. Which type you choose will depend on your goals, and below are the 4 main types we tend to focus on.

1. Demographic Segmentation

The most popular type of marketing segmentation is Demographic Segmentation. This is the most popular type and is usually where you’ll want to start. Demographic Segmentation is the simplest and centers around traits including age, education, gender, and any other indirect character traits.

An example of how you’d use this is if you wanted to segment your audience based on income. Lower income users might not be able to buy your full product, so advertising such would be a waste of your budget. However, maybe you have a “lite” version of your product, in which case showing those lower income users that version would be more suitable.

2. Psychographic Segmentation

Psychographic Segmentation is bit deeper than Demographic Segmentation for marketing. This type focuses on who your customer is – their personality and their interests. If you’re running Facebook Ads then you’ll know that you can target an audience based on hobbies, interests, and beliefs. Psychographic Segmentation is splitting up your audience around these traits.

This is a lot more advanced than the demographic approach, so this isn’t an ideal starting point. That said, if your data indicates that this type of segmentation is where you should be focusing, by all means dive in.

3. Geographic Segmentation

Next up is Geographic Segmentation. As you could guess, this is segmentation based on your audience’s location. This is more useful for companies doing business nationally or internationally. That said, it isn’t completely useless if you’re advertising on a smaller scale.

Even if you’re only operating in Florida, you could use Geographic Segmentation to advertise locally as well as statewide. By targeting users in different zip codes, for example, you can run relevant ads and reduce wasted spending.

4. Behavioral Segmentation

Last up we have Behavioral Segmentation. This is particularly popular among eCommerce store owners because it allows them to segment their audience based on their shopping habits. Things like how they browse, what products they buy, and even the reviews they leave.

This level of segmentation is incredibly specific but if it’s applied to businesses like an eCommerce store, it can be one of the most effective ways of getting more sales. One aspect that makes this type of segmentation differ from the others is that you’ll need a wider variety of data before you begin. Of course, if you’ve been running a campaign for a while, this won’t be an issue.

Best Ways to Use Marketing Segmentation

Before we wrap things up, here are some tips to keep in mind when using marketing segmentation.

1. Identify Your Strong Points

The absolute first thing you need to do when using segmentation for marketing is identify the strengths in your audience. Find out exactly where most of your sales are coming from and consider why that is. If you identify the why, you can segment your audience and continue to run similar ads with that strong group who are responding well, while taking a different approach to those who aren’t.

2. Don’t Disregard Your Weaknesses

It’s tempting to see that one group is bringing down your campaign’s performance and want to stop targeting them completely. However, if you’ve created a buyer persona and, for the most part, that group fits right in, don’t brush them aside yet.

Instead, segment your audience and start testing out different types of ads. Change up your offer, switch up the creatives you’re using, and see if you can produce something that gets results from that group.

3. Be Mindful of Your Budget

This is easy to forget, but you need to be hyperaware of your budget. When you segment an audience you’re going to be running different ad sets. Depending on how you segment them, and how big each audience group is, your budget will need to be spent accordingly.

Let’s say you’re working with a budget of $10,000 per month. You’ve got an audience of 500,000 people and you decide to segment it based on age. The first group, ages 18-25, accounts for 300,000 of those people while the other age groups account for 200,000. After segmenting the audience, you’d most likely want to assign $6,000 of that budget to the 18-25 age group and the remaining $4,000 to the other age groups.

Conclusion

That sums up the basics of segmentation for marketing. There’s no doubt that this is a lot to wrap your head around, and it’s not something a beginner will want to jump right into. You’ll need to run your campaign for a week or so to get some data to decide how you’ll be segmenting your audience but after that your focus will be on how to use that data.

Want to make sure that your data doesn’t go to waste? Book a call with KonvertLab and let’s work together. Our experience with running ads is second to none. Segmentation is just one of the areas where our team excels and we know the best strategies that will get your business great results.

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