The Importance of Market Segmentation During COVID-19

Who are your customers, really? You might say “people who live around my business,” or “people who are interested in (fill in the blank)” but the answer is usually more complex. Every marketing campaign should have a segmented strategy that aims to build customer loyalty, boost profit and increase your return on investment (ROI). The only way to have a successful outcome is to cater to buyer personas that represent your key clients. And whoever your customers used to be, they may well be different in a post-coronavirus world, making effective targeting an essential business survival strategy right now. Enter market segmentation.

 

What is Market Segmentation?

Market segmentation is how your organization organizes customers into cohort groups based on factors such as income, gender, age, personality traits or behaviors.

The most common method for B2C marketing is through “consumer typology.” This is the process of segmenting consumers into five main categories, which likely have been impacted by the COVID-19 crisis one way or another for most businesses:

  1. Geodemographic: demographic characteristics common to people living close together in neighborhoods (the local impact of the virus may have introduced new common resident needs).
  2. Demographic: individual attributes like education, gender and income (you may shift focus to higher income households as less affluent households struggle financially).
  3. Behavioral: product/technology usage and purchase habits (in a world where practically everyone is “Zooming,” your website may attract an entirely different audience).
  4. Motivation, psychographics and social values (virtually any change is possible here).

 

How Can My Business Benefit?

When you put your money into advertising, you need results. Especially now. Market segmentation helps you learn more about your customers as you develop buyer personas, allowing you to target and cater each campaign to a highly specific group. You’ll be able to identify prospects who are more likely to buy goods, allocate your budget more effectively, achieve a greater ROI, convert more leads and generate higher profits.

 

How Do I Use This Information?

Start by conducting preliminary research to understand your customers better by asking some initial, open-ended questions and then examining your analytics and collecting data. Create categories after deciding which criteria (demographics, psychographics, etc.) are most relevant for your business.

Make your segments come to life by fleshing them out into personas with names and specific details: their age, location, income, family status, interests and goals. Create individual campaigns that leverage digital marketing tools to target each of your personas. Then, test, observe and track your results to refine your segments based on your data and conversion rates.

Updating your buyer personas should be part of an annual marketing review. But even if you just did this a few months ago, it’s time to do it again. You may have undergone a major shift in business structure, changed the products or services you offer, or faced limitations on how you can reach new and existing customers in light of the virus.

Your segments may be a moving target at the moment, but by honing your message and your outreach to a specific audience, you’ll produce successful ROIs more regularly and focus your efforts where they’re most likely to be effective, which is more important than ever now.

We understand how difficult it is out there, and we’re here to help. Contact us for a no-pressure consultation.

 

Sources:

https://www.qualtrics.com/experience-management/brand/what-is-market-segmentation/

https://blog.oxfordcollegeofmarketing.com/2014/07/30/cim-new-syllabus-focus-the-importance-of-market-segmentation/

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