Regardless of the product you sell or the service you offer, it is vital that you understand your various customer segments if you want to grow your business.
When did you last look at who are you selling to? Have you asked yourself why do they buy your product? What benefit will your customer gain from doing business with you?
Understand the problems that you solve
Although this is the starting point with any customer segmentation, it can be often over looked. To define your target market and subsequently adjust your marketing mix you need to define and understand the problems that you solve. Once you have a good idea what these are, you can start to work out who is most likely to suffer from these problems and engage in relevant communication via your marketing mix.
Profiling your customers
List all the different types of customers that need your solution to their problems. Once completed, you will start to form a profile of your customers. Further segment them by location, net worth, media used, family size etc.
Consider all the segments in the above table and define them in as many relevant ways as possible.
Who will gain from the value in your offer?
- To whom will these problems be most troublesome?
- Who will have the most to lose by not dealing with these issues?
If you can demonstrate that the cost of NOT sorting out the problems is GREATER than the cost of dealing with them, then your case becomes compelling.
Remember to take into account aspects like emotional upheaval, stress and the risk to reputation when implementing your solution, as well as a bottom line cost. It is all these factors that make up the value in your offering.
Think about your market
Although the world has become one very large market, we actually live in a marketing world of niche marketing. For example, we are no longer prisoners of television schedules. We can watch what we want at our convenience from almost anywhere in the world; meaning every person can enjoy a unique viewing experience.
The web is fantastic at delivering personalised products and services, cutting out many of the distribution challenges that previously existed.
It is these factors that mean it is a more effective strategy to be a big fish in a small pond rather than the other way round. It will be easier to build your reputation and gain referrals.
You will also find you get more from your marketing endeavours.
Therefore, with the previous knowledge gained, start to segment your market. Do you want to work:
- With particular types of people – high net worth individuals, men, women, golfers, and so on?
- Certain geographical locations – Peterborough, The North West, and so on?
- Particular market sectors – manufacturers or accountants, and so on?One way of deciding on the right markets to pursue is to think about your company and your business.
- Look internally at your company
- Do you have particular areas of expertise?
- Do you have unique knowledge of a specific geographical area?
- Are you better at getting on with certain types of people?Sometimes it is better to limit your target market to give you a starting point from which to expand your niche. What else is available?
- Once you have decided the answers to some of these questions you must look at the market to see what else is available. The question you must have an answer to is:
- All these factors could help you establish a particularly attractive offering.
- Why am I uniquely placed to solve the problem?If you are unable to answer the question, you either have the wrong target market or the wrong offering. In this case, more work will need to be done before you start targeting your potential customers.It is worth noting that this is not a one off endeavour and will need to be revisited on a regular basis.
- It may be that for some marketplaces there is no answer. However, in certain sectors or geographical locations there may be a compelling response to that question.