What is segmentation?
Market segmentation is a classification of the target market into groups or segments according to common characteristics. It assists you in identifying the precise communication that will encourage customers to make purchases.
Additionally, it enables companies to more effectively manage their time, money, and other resources. You can determine which prospects and consumers are most likely to make a purchase by segmenting the market.
Benefits of Segmentation:
- Greater Company Focus
- Serve a Customer Better
- Understand Customer’s Needs and Wants
- Higher Return on Investment
- Business Expansion in Other Location
- Personalized Communication
- Improves Campaign Performance
- Efficient Use of Time & Resources
- Designing Products that Deliver Value
- Higher Satisfaction and Customer Retention
- Create Brand Awareness
Types of segmentation
- Customer Attitude
- User state
- Benefits Sought
- Purchase Intent
- Buyer Stage
- Product Use
- Response or Engagement
- Lifetime Value
- Social Status
- Cultural Background
- Family Status
- Marital Status
- Education Level
- Urban / Rural
- Climatic Condition
- Density of Population
- Industry Type
- Company Size (number of employees)
- Job Titles
- Company Structure
- Annual Revenue
- Performance Over Time (growth rate)
Here are some statistics on segmentation in various marketing strategies
Segmentation in Email
- According to a Mailchimp survey, segmentation helped email marketing boost a 14.31% higher open rate.
- According to Campaign Monitor, marketers witnessed a 760% growth in revenue after segmentation.
- Targeted and segmented emails bring in 58% of all revenue.
Segmentation in ROI
- 77% of marketing ROI comes from segmented, targeted, and triggered campaigns.
- Non-targeted campaigns show a 50% lower CTR than segmented campaigns.
Segmentation to Know Customer
- Segmentation helped in better understanding the customer’s challenges and intentions. 82% of firms using personas have developed an improved value proposition.
- Only 4% of companies use segmentation for growth, whereas 42% of marketers don’t segment at all.
Segmentation for Personalization
- Segmentation helps to send personalized communication to customers to achieve better results.
- According to a research study, 49% of customers end up purchasing something on impulse through a personalized message.
- 28% of the audience agree that the primary and vital medium for personalization is a business website.
- According to Janrain’s study, 74% of online consumers don’t appreciate the approach of a website or brand if the content is not personalized.
- When a shopping experience is impersonal, 71% of consumers report feeling disappointed.
- 31% of millennials, 27% of Gen X, and 19% of Baby Boomers list mobile apps as their top two most vital mediums for personalization.
Segmentation plays a vital role in marketing strategies to show impactful outcomes in campaigns. Segmentation marketing requires a data-driven technology solution to map the customer’s journey and understand the actions at every touch point. Understanding the buyer journey has become easy with the proper implementation of segmentation analytics. Brands can utilize segmentation statistics to elevate the campaign results to drive higher revenue.