In the modern business climate, having a vague idea of your “target market” isn’t enough – you need in-depth knowledge of what sorts of people are most likely to purchase your product or service.
That’s what target marketing strategies can give you. Explore everything you need to know about the importance of target marketing, as well as the different types of target marketing segmentation, with our simple guide. First off, check out our definition of target marketing.
What is targeting marketing?
Target marketing is a strategy that involves breaking a large market down into smaller segments to focus on a specific group of customers. Generally, target marketing is used to concentrate your marketing efforts on the segment (or segments) of customers whose needs are most closely matched by your product or service offerings. This makes target marketing strategies particularly cost-effective and can help to increase sales, boost cash flow, and attract new business.
Types of target marketing segmentation
There are four key types of target marketing segmentation, which are as follows:
Demographic segmentation – When splitting customers into demographic groupings, you’ll look at measurable statistics like gender, income level, education, age, marital status, and so on.
Behavioral segmentation – Focusing on spending habits, brand interactions, and user status, behavioral segmentation explores the way that potential customers behave. Do they buy products to fulfill a need? Are they big impulse buyers? How do they view your product?
Geographic segmentation – Simply put, geographic segmentation splits up the market by location. You can look at a broad range of potential segment groupings, including postal/ZIP code, city, province/state, region, neighborhood, or country (if your business operates on an international level). The main idea behind geographic segmentation is that customers based in different areas have particular product/service needs.
Psychographic segmentation – Finally, there’s psychographic segmentation, which divides the market based on lifestyle preferences or socioeconomic status. There are several different factors that you can look at, including values, interests, beliefs, and so on.
Through target marketing segmentation, businesses can become much more specific when determining which customers to focus on. In short, you can talk specifically to the customers who are most likely to enjoy and benefit from your products. Plus, once you’ve identified your ideal customers, promotion, pricing, and distribution becomes much more clear-cut.
Understanding the importance of target marketing
Target marketing plays a significant role in any holistic marketing strategy. It has an impact on a broad range of areas, including branding, advertising, and business operations. Here are some of the key benefits associated with target marketing strategies:
Differentiate your brand – Differentiation is key for any business competing in a packed market, and by speaking to a smaller target marketing segmentation of that market, rather than trying to speak to everybody, you can help make your brand stand out from the crowd.
Speak to a specific audience – The ability to speak to a defined audience can help to simplify your marketing efforts, as it’s much easier to make a message resonate with a smaller grouping of individuals than it is to craft a marketing campaign or slogan that resonates universally.
Boost customer loyalty – A major part of the importance of target marketing is the fact that it can help your brand build deeper and longer-lasting relationships with customers. They’ll feel like you’re an advocate for their needs, which can encourage them to stick around for the long-haul.
Improve your products/services – In addition, intimate knowledge of your customers can provide you with a deeper understanding of your brand’s products, which may enable you to make improvements that wouldn’t otherwise have been apparent.
As you can see, the importance of target marketing extends not only to your ability to generate leads and convert sales opportunities, but also to the improvement of the product/service itself.
How to identify target marketing opportunities
Once you’ve decided to pursue a target marketing strategy, the first thing you’ll need to do is identify who your most suitable target market consists of.
Think about the problem that your product or service solves and who is most likely to experience this sort of problem. Then, once you have a solid understanding of who is most likely to want/need your services, it’s time to home in on your target market via target market segmentation.
Think about the types of target marketing mentioned above, from demographics to geographic. Then, after you have a reasonably comprehensive picture of your “ideal” customer, it’s time to craft some brand messaging that speaks directly to their needs.
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