Targeting the right audience, the right way

What is audience segmentation?

It's a simple question, with a simple answer. Audience segmentation refers to a strategy which outlines how to break down your target audience. Although this may sound like a no-brainer, it is vital part of forming a successful marketing strategy. It's important to have a clear understanding of who you are targeting before you begin building out your broader marketing strategy - everything stems from audience segmentation.

There are many different ways to approach this exercise. But in its' simplest form, it's important to look at it in a way that simply 'makes sense' - what makes sense for my business, given the product and services areas we as a business live in. For example, a company selling Business Insurance wouldn't segment their audience based on how often they go to the grocery store. Rather, they would use a measure like revenue or number of clients to determine their size.

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How should I segment my audience?

Before you get to the stage of building out your segment, you first need to have a think about how many target audiences you have for the products and services you offer. If you are offering multiple product/service ranges, are they intended for different audiences? A broad product/service range offering calls for multiple target audiences, whereas a single product/service range only requires one audience. We can organise our audiences according to how many products and services ranges we are offering.

To build our audience segmentation, we're going to use a basic segmentation graph which you can see below:

So you're probably asking yourself, 'How do I start this process?". Well, start with the basics; Who is my product/service intended for? How can I categorise the target audience as a collective group of people? Back to our Insurance example, if your product offering was construction insurance, then your target audience could be recognised as 'Construction Workers'. This is a variable that everyone who lives in the world of our target audience has in common, so it is our key to grouping them together.

Now we have our target audience.

Then we move onto the audience segments. There are many ways to approach this, but they all begin with the same question "Who in this audience do we want to sell this product/service to?".

If we are selling construction insurance, we can break this down a few different ways, depending on WHAT MAKES SENSE (recall our earlier note).

For example, we could break the segments down according to:

• Profession
• Size of company
• Revenue of company
• Region or state

For simplicity, we're going to use profession in this example.

Now our audience segmentation strategy is beginning to take shape as you can see in the updated schematic below:

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Building our audience profiles

The next and final stage of creating an audience segmentation strategy is developing your audience profiles or 'personas'. They are often referred to as personas as they are meant to resemble real-life 'personalities' which are the micro-segments within your audience segments.

We can break the segments down into audience profiles by taking our previous exercise one step further and segmenting based off micro-variables as below:

• Profession
  • Project Supervisors
  • Tradesmen
  • Project Managers
  • Engineers
  • Office staff
• Size of company
  • Sole trader (1 employee)
  • Partnership (2+ employees)
  • Small company (2-10 employees)
  • Growing company (10-20 employees)
  • Established company (20+ employees)
• Revenue of company
  • Up to $200k
  • $200k to $500k
  • $500k to $1m
  • $1m+
• Region or state
  • NSW
  • QLD
  • VIC
  • ACT

As you can see in the final form of our segmentation strategy below, we've used multiple of these 'micro-variables' to build our audience profiles. They are profiled according to certain characteristics that will give us insight into:

• Which products are right for them
• How to best communicate with them
• Where to find them
• How to price our product

This is just the beginning

You have just learned how to create a basic segmentation strategy, however there are many more complex ways this can be approached to build a truly sophisticated and effective strategy. Step Marketing specialise in providing services like this to businesses of all size. If you would like to book in a chat with one of our marketing specialists, click below:

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