As your startup’s CEO and chief bottle washer, you’ve undoubtedly spent a fair bit of time compiling your ideal buyer persona. There’s so much to know about who you’re targeting your widget at, demographics, psychographics, geographics, et al, right? And once you have all of that data sorted, sifted, and parsed, the last thing you want to do is more sorting, sifting, and parsing.
But what if we told you that by conducting one more round of research, and creating separate segments of your ideal audience, you could potentially see better ROI on your marketing spend, pull in more sales faster, and even develop your own army of brand evangelists within a matter of months of launch?
Marketing Segmentation: The Basics
Marketing segmentation has the power to do all of that, and more for your startup. It’s the practice of carving your overall target audience into smaller niche markets based on individual categories or parameters. For example: say your first product is an app that aims at encouraging people to save a certain percentage of their net income. You’ve done initial market research and determined that Gen-Z is your ideal audience, so you’re tailoring your campaigns for mobile-friendliness, developing a robust social media presence on all the right channels, etc.
Here’s the thing, by saying “Gen-Z” is your target, you’re only narrowing your target from the entire population down to it’s largest single cohort. So from many millions to several million. Not as helpful when you look at it like that, huh? What if you could go further and narrow it to a segment of less than one million? Keep researching and maybe you’ll find out that Gen-Zers who recently moved to a big city are a solid niche to target.
These folks likely made that move for a good job, right? So not only are they more likely to have income that supports the idea of saving since they’re not necessarily working paycheck to paycheck, but they’re also undergoing other life changes and the idea of adding one more little one like your app will feel appropriate. By using geographic data, alongside your original demographic research, you can focus your initial marketing push at these recent relocators and stand a much better chance of landing sales.
Marketing Segmentation for Startups: The Why
The amount of work needed to segment an audience by parameters you already have in place is minimal, yet the potential rewards are huge. You’ve already put in the time and energy to develop your persona based on a combination of the factors listed above: demographic, psychographic, and geographic. All that’s required now is to divide that total audience into smaller slices based on one particular factor in order to better target content and messaging starting pre-launch.
It’s easier, and cheaper, to target smaller segments of a population. Think about Facebook ads. If your target is 2 million people and your ad is being served 1 million times a day, that’s expensive. Now imagine that your segment is 1 million people, and you more precisely worded ad is being served 350,000 times a day. That’s way cheaper and is being seen by a more appropriate audience to boot.
That narrower targeting means more wins earlier on in your campaign, and that does wonders for cementing your reputation with your early adopters. These are the folks who are more likely to turn into evangelists, touting your app to all of their friends and coworkers. By simply focusing your efforts on a smaller niche segment of your audience, you reap the rewards often reserved for the biggest players in their industry: a solid reputation, brand ambassadors, and word-of-mouth marketing.
Segmented Marketing: The How-To
Assuming you’ve already done at least an initial round of market research to develop your buyer persona, the first step is to dig deeper into the same factors. Start with Google Analytics and similar platforms that can uncover your audiences browsing habits. You’re looking for the demographic info like age, gender, education level, etc. This basic info will form the backbone for your next round of digging where the niche segments will start to clarify themselves.
Next, start sifting your audience into segments. To follow up on our earlier example, you’re looking for a segment of Generation Z who can spend a little on your app in order to kickstart their saving for their future. Something like a recent geographic move for a great job would be an ideal way to segment these folks.
And finally, look for a way to segment one more time, say by current income level. Just because someone got an advanced degree from a great school doesn’t mean they’ve found their dream job. Underemployment is rampant among this generation, so you’ll want to be careful who you target with an app for saving. People who are working paycheck to paycheck aren’t going to take kindly to seeing messaging in their Facebook feed about how important saving money is when they’re not sure they can make rent that month.
Customized Marketing: The Wrap-up
Now that you have your overall market divided up into smaller niche segments, you can customize your messaging, content, and channel presence specifically to each segment. Early wins are key to creating happy customers who will willingly become your first brand ambassadors, working on the ground to help you spread the word about your app. By targeting only the segments of your initial audience who are the most likely to convert quickly, you save yourself the time, energy, and importantly the budget of trying to reach a wider audience.
Segmentation means you can word your messaging to resonate with that niche. It means you can spend less money on first-round advertising, and put more resources into development. It also means you can target several of these smaller niches at one time, a sort of A/B test of your market, to see which group responds the best. And with the money you’ve saved, you’ll be ready and able to rework your campaign content based on the results. From there it’s a simple matter of iterating your marketing content and expanding your segments gradually as sales increase until you’re reaching your entire ideal market with the content they want to see.