Our Thinking

Back to Basics: Market Segmentation

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Who is your target market? Some common answers I have heard: everyone, all women/all men, every salesperson, every business owner, all accountants, all real estate agents etc. I do not disagree when my clients think that their product or service can be used by everyone and the whole world is their market. However, the truth is that if you target everybody, then chances are that you may end up getting nobody!  The logic that if I am able to capture 1% of the $100 M market, I would be a millionaire only holds true mathematically. Generally, capturing that 1% market share is not so easy, especially if you do not define your target. The solution is to segment-segment-segment until you define the right target audience.

Market Segmentation: Questions & Answers

The first step is to ask yourself some open ended questions – For whom is my product/service meant for? Now answer based on the demographics – location, gender, age, ethnicity, knowledge of languages, disabilities, mobility, home ownership, employment status etc. Then answer the same questions based on the psychographics – personality, values, attitudes, interests, and lifestyles. Now, based on the above data, ask how you would identify the ideal prospect in the crowd. Dig deeper until you find your right audience. The next step is to do some test drives (marketers call it market research and techies call it A/B testing) and validate your answers. It definitely gets more complicated if you have multiple products and services, however the strategy is to take one step at a time and then consolidate. A number of times this strategy would result in dumping some of the products/services or coming up with new innovating ideas.

Market Segmentation: Choosing the right technology

Once you have segmented the market, the next step is to adopt the right kind of technology that allows you to build on that. Ask yourself the following questions:

1. Do I have the right prospects in my list?
2. If yes, how many of these are my target?
3. What is their level of interest?
4. Where do they fit on the relationship curve (Awareness-Preference-Trial-Commitment)? In other words, how strong is their relationship with your business?
5. When likely are they going to commit?

Obviously, you won’t have the answers if  you are still using a mailing list software like Constant Contact/MailChimp etc. However, if you are using a modern cloud-based Client Relationship Management (CRM) solution (e.g. Infusionsoft, SalesForce.com etc), you can not only answer all of these questions but can also automate actions to communicate and engage with your prospects (Marketing Automation). In today’s age, this is important to build trust and strengthen the relationship as the prospects move through the relationship curve. If you need a demo of how such a solution works in real-life, then simply select one of the courses and fill in the following web form. We would send you our “no-spam” useful and automatic communication on your topic of choice.

Ashish Malik is Partner, Client Services at 108 ideaspace inc., a consulting firm that extends business strategies by innovating in Strategy, Technology and Design. A Certified Consultant, Ashish has helped several clients automate their sales and marketing and grow their business by implementing CRM. For more on Ashish Malik or 108 ideaspace, visit ideas108.wpengine.com.