Tap Into New Markets
Every business would love to reach new markets. But without segmentation, it can be hard to identify those opportunities. However, when you better understand who your existing customers are, you can sniff out gaps in who you’re reaching and fill them using targeted marketing campaigns.
Take this case study on Canon as an example. While the camera company had many customers who used their photography equipment for professional use, they realized there was a big opportunity to grow in the low-end digital camera market. And who did they find to target with those products? Interestingly enough, they turned to children.
While many adult amateur photographers simply rely on their smartphone cameras to capture the moments in their lives, parents are hesitant to buy their kids' smartphones. Because parents don’t want their little ones texting, calling, and using apps, Canon realized that parents buying low-end digital cameras for their kids represented a great opportunity.
They launched a marketing campaign that played into children’s interest in photography and art and snagged a 40 percent market share in the low-end digital camera market within a year of launching their campaign. Without research into their existing segments, Canon would have struggled to identify this unconventional opportunity to snatch up market share.
Generate Greater Returns on Sales
McKinsey took a look at segmentation in the retail space and found that it garnered benefits when it came to increasing returns on sales. A retailer in Europe who used segmentation techniques saw a three to five percent increase in returns on promoted sales
How did segmentation help them do that? They took a look at customers’ past behaviors during other promotional periods. By seeing how they reacted across various marketing channels, the business was able to tweak its strategies to set prices based on consumer behavior.
Drive Impulse Buys
While a great many consumers will write off a business entirely if they don’t send them personalized messages, the benefit of personalization goes beyond simply keeping prospects on the hook or retaining customers. Personalized messages also play a major role in impulse buys. Forty-nine percent of consumers said they bought something on impulse because it was presented to them with a personalized message.
When you convince your customers that you know them better than they know themselves, you eliminate some of the hemming-and-hawing in their purchase decision process. Instead, they’re comfortable jumping right to the sale.
Exceed Revenue and Lead Goals
Ultimately, every business’s goal is to hit their revenue targets and (dare to dream!) maybe even exceed them. A great way to set yourself off on the right track to do so is to engage in personalization.
Research from Cintell found that the businesses that exceed their lead generation and revenue goals, they’re much more likely to engage in segmentation than their counterparts who reach or fall short of their goals. They’re 2.3 times more likely to research the motivations of their buyers and 1.6 times more likely to understand the fears and challenges their buyers face.
By understanding the inner workings of their customers’ minds, they’re able to build products and services that address customers’ needs and craft marketing messaging that resonates. This all comes together to help them smash revenue goals.
Easy Methodology to Apply Customer Segregation
Now, you must have got a clear idea of what customer segregation is all about. But, one more thing that you need to know is that this feature works in a two-way direction. One is horizontal segmentation and the other is vertical segmentation. In a horizontal manner, the companies focus on one particular field to list the clients. Whereas, in the vertical segmentation, the provider looks for different arrays’ to filter the customers.