Join Doug Ladd for an in-depth discussion in this video Geographic segmentation, part of Marketing Foundations: Customer Segmentation.
- Knowing where your customer lives can save your business time and money. This knowledge can also give you a significant competitive advantage. Geographic Segmentation is a method of dividing your customers, or people who are not yet your customers, into groups based upon where they live. There's one thing that every person in America has in common: we all have a zip code that corresponds to the location where we brush our teeth each morning. If you're like me, you get mail at an address in that zip code.
And much of that mail was not something you requested. You call it junk mail, but the people that sent it to you call it marketing material, or direct mail. The reason marketers use Geographic Segmentation is because people tend to live near other people that are like them. We congregate in locations where we have a high likelihood of being around other people that have similar cultural values as we do, similar levels of education, similar tastes in housing, and similar income levels. One of the keys to success in marketing is being able to efficiently spend your marketing dollars by hitting those customers who are most likely to respond to your message.
Geographic Segmentation can help you target the right customers in the right locations, and it isn't just for consumer marketing. You can use Geographic Segmentation for business-to-business marketing, as well. A common mistake some businesses make is to assume that Geographic Segmentation is only useful for retail businesses. It does make sense if you have a retail shop, you would want to target those people that live near your location for your promotional messages. But there are many business leaders with a web presence that want to target a specific socioeconomic, or even racial, group.
You can use Geographic Segmentation to help you do this. If you think of Geographic Segmentation as a funnel, the method of segmenting your customers, or future customers, by geography, flows from a broad geography down to a very narrow or specific locale. For example, you could look at your targets as everyone in the United States, or narrow it to a region, such as the West Coast, or down to a state, such as California, or further, to Southern California, or specifically to the greater Los Angeles area, on down to Beverly Hills, and onto a zip code, such as 90210, and further, to a specific neighborhood or street.
Being able to do this would certainly be helpful to you if you owned a restaurant near Mullholland Drive, and wanted to use direct mail to create awareness for your location. This would also be helpful if you sold luxury automobiles in the LA area, and wanted to place billboards in that area. Or if you use telemarketing services to make people aware of your upcoming yacht sale, being able to focus your dollars on certain neighborhoods may make sense. Do you occasionally get an envelope from Valpak in your mailbox? Or do you subscribe to a magazine? The advertisers using these media are employing Geographic Segmentation as part of their marketing program.
Valpak has the ability to target specific zip codes in their mailings. Many newspapers and magazines have the ability to print regional editions, for those advertisers who want to target a specific area. Even Facebook has the ability to target users at the zip code level. So now that we've covered why you might use Geographic Segmentation, let's talk about how. You can see a map of every zip code in every state in the US at zipmap.net, or unitedstateszipcodes.org.
The US Postal Service has programs that allow you to deliver direct mail material to the zip code level. If you do an online search for "advertising by zip code," you'll find a number of companies that specialize in this area. The next time you collect your mail, pay attention to who is sending you coupons and advertising material. They're using the Geographic Segmentation tools we just covered. And give them your business, they'll appreciate it.
- Segmenting by location
- Segmenting by demographics
- Segmenting by usage or other behavior
- Why segmenting is important
- Creating and using customer personas