How to Segment a Target Audience

Nov 05, 2020

You’re a unique human being with your own interests, background, and values (so am I!). You want to be treated like the specific individual you are, not like an anonymous nobody amid a faceless mass of other anonymous nobodies. We all do! It’s human nature. That’s why we like to be around people who we feel truly understand us — and the same thing is true for brands. People like brands that treat them like individuals, that make them feel seen and heard. So how do brands achieve that? Through audience segmentation.

Why Audience Segmentation Matters So Much

People have always liked to be treated as individuals, but the demand for personalized, individualized messaging has exploded in recent years. With the rise of social media and customizable digital content, and an increasing disinterest in traditional hierarchies, people today just don’t respond to generic messaging anymore. This means that brands need to create messages that speak to a specific individual and their values, interests, and so on. Of course, this can be challenging, because messaging that works perfectly for a particular subset of your consumers might alienate another subset. This is where segmentation comes in.

Essentially, audience segmentation is the technique of using data about your customers and prospects to organize them into different groups based on similarities. Once you’ve divided your audience into these groups, or segments, you can create more tailored messaging for each group. You can also develop different marketing strategies and tactics based on what would be most effective for different groups.

Segmenting your target audience allows you to deploy a ton of different marketing and retention strategies that grow and strengthen your user base. With audience segmentation, you can clearly define your target audiences and then create messaging that resonates specifically with them, without alienating anybody else. Depending on the segmentation criteria you use (more on that below), you can also use segmentation to meet a specific need the customer has, which helps drive up conversion rates. Delivering tailored messaging through segmentation also builds stronger relationships with existing customers, helping to bolster customer loyalty as well as referrals and word-of-mouth growth.

In a world where people want to feel like content was created just for them, audience segmentation is the only way to come close to achieving that goal. In fact, it’s such a no-brainer that 91% of market leaders use audience segmentation!

Different Ways to Segment Your Target Audience

So once you’ve decided that you want to segment your target audience, you need to make a number of decisions. The first and most important is: what criteria will you use to segment them? There’s a ton of different information you can gather about your users and prospects, so you must carefully discern which pieces of information are most relevant when it comes to your particular product or service. For instance, if you run a company that sells artisanal coffee beans, you probably wouldn’t want to segment your audience based on political or religious beliefs, but it could be helpful to segment based on employment level (they want coffee before work!), family (do they have kids? Coffee helps with that!), or location (someone in New York may be more interested in beans from a local Brooklyn roastery than one in, say, Kansas).

There are countless different criteria you can use to segment your audience, but some of the most common are:

  • Demographic: Demographic data includes statistical information, like a person’s age, income, family makeup, gender, and education. You can use this information to create different audience segments as well as to define your target demographic for prospects. For instance, an app that streams beginner-level home workouts would rather target a 45-year-old homemaker in a suburb than a 19-year-old male student in an urban center.
  • Lifestyle/Psychographic: This type of data includes information on a person’s interests, attitudes, beliefs, and hobbies. Using this data allows you to create segments among an audience that’s demographically very diverse. For instance, if you’re a grocery delivery company that appeals to both the 45-year-old homemaker and 19-year-old student described above, you might use psychographic data to learn that they both care a lot about buying organic products, and tailor your messaging accordingly to catch both consumers.
  • Behavior: These are the most concrete data points, because they’re based not on information from which you can extrapolate buying behavior, but on actual buying behavior. It includes purchasing information for a user, looking at what they buy and how often. Someone who makes purchases on a near-daily basis will need different messaging than someone who only makes infrequent purchases after a lot of thought and deliberation. Segmenting by buying behavior lets you strike the right tone with both groups.
  • Buyer’s Journey: There are three stages of the buyer’s journey — awareness, consideration, and decision — and a person will need different messaging depending on what stage they’re in. Segmenting by the buyer’s journey lets you provide the perfect message for someone as they’re just beginning to look for a solution to their issue, then a different one when they’re weighing their options, and a powerful closing message when they’re ready to make a purchase.
  • Geographic: This one is pretty straightforward: where do your customers and prospects live? Geographic data isn’t always helpful, but depending on your product or service, it can be invaluable. For instance, if you’re a website that sells concert tickets, you need to know exactly where your audience lives in order to promote the right events. You can also use geographic data to figure out when to hit certain groups with messaging. Do you sell outerwear? Sell your winter gear to Chicagoans starting in October, market your water shoes to Hawaiians year-round!

If you want to really zero in on specific people, you can also create subgroups within your various segments. For instance, if you decide to segment by demographics, you may have a segment for married men under 40. You could further segment this by adding an education layer, dividing the group into those with no degree, a B.A., or a graduate degree. The variations and level of detail are endless!

Gathering Data and Beginning to Segment

Once you’ve decided how you want to segment your audience, it’s time to start gathering your data — data is the seed from which segments can grow. There are lots of different ways to gather data, from the old-school to the high-tech. Some options are:

  • Surveys: Pop-up surveys on your website, or questionnaires sent through email, or even good old surveys in the mail can be very informative. With just a few short questions, you can gather some really useful info.
  • Link tracking: In your email marketing, you can add tags and tracking information to your links that help you learn about the people who click. For instance, if your weekly newsletter includes a link to your podcast, you might add the tag “Listens to Podcasts” to that link. Not all email marketing platforms have this feature, but many do.
  • Phone calls: Low-tech and time-consuming as they may be, phone calls can offer a new level of insight into how a certain type of customer thinks and what they value. While they’re not feasible for segmenting a very large audience, they can be helpful for learning about a relatively small customer base or for gaining a deeper understanding of a segment you’ve already created.
  • Analytics platforms: Platforms like Google Analytics or Kissmetrics (and many, many more) can tell you useful information about your users, including age, gender, location, and interests.

Once you have your data, you can begin to create different personas based on what you’ve learned about your users. These personas should be as detailed as possible to create a thorough representation of the type of person included in this segment. For example, you might have a segment represented by a persona named “Monica,” who is a married, childless woman in her late 30s, living near a major urban center, who enjoys staying active and outdoor activities.

Personas help you communicate authentically with your target segments by transforming them from data points into flesh-and-blood people with names, families, and interests.

Best Practices for Using Audience Segmentation

So segmenting your target audience requires 1) deciding how you’ll segment them; 2) gathering data; and 3) creating your segments and personas for each. Those are the broad strokes of the process, but to be truly successful with market segmentation, you should also keep in mind a few best practices:

  • Don’t go too narrow: Of course, you want to have a clear and specific image of who you’re speaking to. But be wary not to go too far in this direction and create a segment that includes only one or two people. If you find that some of your segments are capturing nobody or very few people, consider dropping a couple of the filters.
  • Set goals and measure your success: Just like anything in business, audience segmentation only works if you know what you’re using it for. Do you want to gain more newsletter subscribers? Increase conversions? Clarify your specific goal with audience segmentation, then quantify it and regularly assess to see how you’re doing.
  • Don’t etch your segments in stone: Allow your segments to be fluid and adapt them as needed. If you’re not making progress toward your goals, consider what could be wrong with your segmentation. Are you a footwear company segmenting by geographic location? Consider creating segments based on demographics instead.

You know who you are as a company, and that’s what makes you a good brand. But for that brand to reach the right people, you also need to know exactly who your customers are. By segmenting your audience, you’ll be halfway there.

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