Throughout the years I’ve heard—and said—plenty of excuses for not starting or succeeding in marketing. Most of these come from a scarcity mindset around the customers we feel we want. In my early days as a photographer, I felt I had to have the clients that were willing to pay six figures for a session, otherwise I was somehow failing in the industry. It took me years to see that what I offered—natural light sessions with very little (if any) retouching and digital files—wasn’t what those high dollar customers were looking for. And you know what? I’m absolutely fine with that. The truth is, there are plenty of customers for every type of business, you just have to understand who they are and what they want. The key to this is market segmentation.
What is Market Segmentation?
Market segmentation is dividing a market into groups who share a similar set of traits, wants, and needs. Basically, it’s finding the right people who want/need your products/services and will buy them. I find it helpful to think of this like Goldilocks. You’re trying weed out the consumers who are too this or that, to find the ones who are just right for your offerings. This is your specific market segment.
How to Breakdown Segments
When we look at market, it can seem overwhelming at first glance. Let’s face it, there are millions of people who would be willing to buy cupcakes. Breaking the market down into smaller, more specific groups is how we find the exact people we’re looking for. Let’s take a look at the ways we can break down a market into focused groups.
This is often the first step in creating a market segment. Sticking with our cupcake analogy, it would be hard to sell fresh cupcakes to someone in El Paso, TX if you live in Annapolis, MD. Zeroing in on the area you will operate in is essential to finding a market segment that will purchase your product/service. By focusing on a small, specific geographic area you set yourself up for success by being able to understand and gage the wants and needs of the people in that area. Also, keep in mind that different regions react to products and marketing strategies in different ways. What works in Ames, Iowa may not be the best strategy in Shreveport, LA.
Note: This area may change or expand as your business grows, but when starting out it’s best to start small and allow for organic growth.
This is where we get into the nitty-gritty of who our target segment is. Demographics are the measurable variables associated with consumer groups. Using this type of segmentation, we’re essentially building a model of our target clients. Demographics include details such as age/life stage (teen, young adult, retired, etc.), gender, income, marital status, family life stage (single, married, young family, empty nester, etc.), income, generation (Millennials, Gen Z, etc.), race, and cultural background.
Psychographics are where we start to get into the intangible variables that separate groups of people. Here, we start to look at the lifestyles, personality traits, values and psychological qualities. Psychographics tell us how our target market thinks and operates. Does she value social status or durability more? Is he artistic and outspoken or more quiet and analytical? Understanding how your target market thinks and lives will help you position your marketing where they’re more likely to see it.
When we talk about behavior in marketing, we’re looking at purchasing behavior; this refers to the segment’s knowledge of, attitude toward, and how they use or respond to a product/service. When we look at the behavior of our target segment, we’re considering the reason behind their purchase. Are they purchasing out of necessity or to obtain some benefit? We also want to know how often their likely to purchase for us. Will they purchase only on special occasions, as-needed or regularly? Are they loyal to specific brands or do they jump around to get what they need or get a better price? Have they purchased from our brand before or are they totally new to our products/services?
Putting It All Together
To figure out exactly who you’re looking for, it’s helpful to create an Ideal Customer Avatar (ICA). To do this, write down the type of person who would be likely to repeatedly purchase your products/services in as much detail as possible. Get granular! How old is he? How many kids does she have? Where does he ate out at? What kind of jeans does she wear? What Astrology sign or Enneagram number is he? Give your ICA a name, a description and a personality. The idea is that all your marketing will be talking to this specific person, because there are thousands of people just like them out there.
Figuring out exactly who you want to market to is a complex adventure and your target market(s) will evolve over time. To get you started, here are a couple easy-to-use (and FREE) tools that I love.
This nifty service is tailor made to help businesses find their target market. While signing up for Claritas services may be a bit pricey for those businesses just starting out or on the smaller side, the company also has a Zip Code Lookup tool that’s free to use. Claritas uses 68 different segments based on demographics, pyschographics and purchasing behavior, which it applies to local populations. Just input an U.S. zip code you can can see which segments live in that area. You can find a list of all 68 segments and their breakdown here.
Using Claritas can give you insights on household income ranges and population age ranges. By clicking on the segment listed, you can see a synopsis of the segment as well as demographic traits, lifestyle & media traits and a map of where this segment is located most around the country (you can zoom in on specific areas).
Another great tool for understanding demographics is the U.S. Census Bureau’s website. Using the Census, you can easily look up information by state, county, city, town or zip code. This tool is wonderful for those who want to focus locally or expand to area. You can compare up to 5 locations in an easy-to-read table, which is great for narrowing down areas you may wish to focus on and understanding the unique make up of each one. I highly recommend using this tool in conjunction with Claritas.
Figuring out your target market segment can seem like a daunting task, but using a mixture of science and personal insight can make for terrific start. Creating a marketing campaign for one specific person—knowing there are thousands of others like that person that will also see your message (and likely purchase your products/services)—makes this important task feel much easier. Using tools like Claritas and the U.S. Census will help guide you in the right direct and give a foothold into understanding who you’re talking to and why they would want to purchase your products/services.
Have questions about marketing segmentation, finding your segment or marketing your small business? Leave a comment below.
Eaton, M. (2020, August 11). Segmentation. prezi.com. Retrieved January 23, 2022, from https://prezi.com/_tefmqctqvlq/segmentation/
U.S. Census Bureau quickfacts: United States. QuickFacts United States. (2021, July 1). Retrieved January 23, 2022, from https://www.census.gov/quickfacts/US
Zip Code Lookup. Claritas. (2022). Retrieved January 23, 2022, from https://claritas360.claritas.com/mybestsegments/#zipLookup