From the course: Small Business Marketing

Identifying your buyer

From the course: Small Business Marketing

Identifying your buyer

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- It's no mystery that the success of a business hinges on having customers. And in order to have customers, you need to find them. And in order to find them, you have to message them. And to message them, well you have to know them. If you're marketing, without really knowing your customer, stop. You see the process of finding and knowing your customer is accomplished through customer segmentation. Customer segmentation is taking your broad target market and breaking it down into smaller groups of people that have a lot in common. When you have focused customer segments, you save money because your marketing is more effective. To start segmenting, you need to define your ideal customer. You take the broad market and divide it into segments organized by multiple attributes, and these attributes combine demographics, psychographics, behaviors and needs. Demographics factor in age, gender, marital status, income and education level. And this is the broadest targeting. You might target say 24 to 45 year olds who make less than $50 thousand dollars annually and are single, but this isn't quite specific enough of a segment. If we put that audience in the room, how similar would they really be? Would they all love sports, for example? Probably not. So you need to layer, and one approach to layering is by looking at psychographics. And this classifies a group of people according to opinions, beliefs, values, attitudes, and interests. So, we might create a customer segment based on initial demographics, and then add in that this audience values environmentally conscious companies and likes reading books. Members of that audience will have a lot more in common with one another. And you can also use relevant behavioral attributes to describe your target customer. So here, you might identify consumers based on an action they take and how frequently they take it. This could be say, people who buy a cup of coffee everyday or those who maybe watch three YouTube videos per week. Another market segmentation technique is needs based segmentation. With this approach, you divide the market into customer segments that each have distinct needs. Take the Nest thermostat for example. For some, it's a valuable way to reduce their energy usage. For others, it's a useful way to turn on the heater at a vacation property. And for others, it might be a way to monitor the temperature in a child's room. Same product, but with consumers that will all receive different messaging based on their need. Now you want to identify segments that you feel have a high likelihood of needing or wanting what you're selling. Once you have your segments, you'll be able to build campaigns that speak directly to that customer. To succeed at marketing small, have specific segments. You can always add more as you find success.

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