Why Customer Segmentation Drives New Business

Most businesses don’t understand their customers. Plan and simple.

They have ideas about their customers; they know who they wish were their customers; but, they have no concept of how to approach them, how to engage them, how to take a brilliant idea about what a product or service can do and jam that idea right into their customers’ heads.

But doing this is easier said than done. It’s hard knowing people, knowing how they get their information, how they process it, which frames of reference are most attractive to which groups. It’s hard, but it’s also profoundly necessary.

What’s needed is a solid strategy for customer segmentation and the development of personas.

But aren’t those expensive and labor intensive and prone to error? you’re probably asking.  To which I answer, well, kinda. It’s true that segmentation and persona development are labor intensive—someone needs to sit down, think through the segments, and develop personas—but what they offer are real, serious opportunities to approach your marketing/sales targets as people and create efforts for acquiring them as such.

And about the error: yes, personas can be off at first; they require optimization like anything else in your business. But again, they’re worth it. They let you create marketing that address specific human concerns and, as you already know, that’s how you get them.

Performing a Customer Segmentation

The process of segmenting customers will be different for each business, primarily because where you are in the company’s lifecycle directly affects your access to accurate data. More established companies (most of whom, very likely, already operate with some degree of customer segmentation) have a much clearer understanding of which industries their products serve, what the use cases are in each industry, and can begin breaking down the industries based on potential buyers.

New businesses, however, will have to be more creative. Keys to new business success include:

  • Arrange a meeting with the product manager, the CBO, and the CEO of your company. Use this meeting to brainstorm industries and use-cases where you see your product being the most applicable.
  • Talk to your sales staff. Which industries are they succeeding in the most? Failing? If you can, listen in to some of the conversations and make notes about use-cases, industry concerns, and the kinds of questions being asked about the product.
  • To mis-quote TS Eliot: “Good marketers borrow, while great marketers steal.” Look directly to your competition to discover possible markets. Chances are, at least one of them has paid for really strong data and/or have implemented strategies that work, and there’s no reason you shouldn’t capitalize on that.

 Armed with this information (and any other you can get your hands on), it’s time for the real work to begin: identifying and developing various personas for each target industry.

Developing Customer Personas, or how you’ll learn to survive looking through Facebook for hours 

 Once you have your data, get started. Brainstorm distinct types of buyers in each industry. For example, if the legal profession is one of your targets, you might come up with personas like “high-volume, tv-advertising attorney”, “upstart, urban lawyer,” and “high-end, low-volume senior partner”, each of whom comprise a large sub-segment of the industry and who could feasibly approach your product for entirely different reasons and with different use-cases.

Think this through for each industry you’ve identified, listing the different persona-types in a spreadsheet for safe-keeping.

And then the fun begins. You’ll want to build a spreadsheet, most likely in Google, as you’ll need to fill out the same persona information for each in a new sheet.

The Fields to Include on Your Customer Persona Spreadsheet

For each user persona, you’ll want to include the following fields:

  • Name: It’s hard to humanize someone without naming them
  • Sex/Age/Location Type: In addition to the basic demographic information, discovering what kind of place they live in (rural, suburban, urban) can offer insight into the content you create for them
  • Work/Market: How do they fit into your segment? What locations are included in their target markets?
  • Personal Information: What kind of degrees do they have? How (if at all) do they participate in their communities? What do they like? Hate? Who are they as people
  • Content They Share: What kinds of content are you likely to see shared on their Facebook or Twitter pages?
  • Content They Consume: What makes them click a link, open a book, or share an article? (This will really clue you in on how to market toward them)
  • Where They Find Information, in Order of Importance: Here, you’ll really have to think about what it means to be them as people. Are they most persuaded by word-of-mouth, newspaper, local forum?
  • Hurdles: What difficulties do they face when at work? Where are their pain-points?
  • Technology: How do they like to view content? On a desktop, a phone, a tablet? Mac or Android? OSX or Windows?

To fill these out, you can do one of two things: you can either interview a large set of your current consumers, OR you can stalk Google and Facebook, like the Lord intended.

If you choose the latter path (certainly more cost-effective and less time-consuming), search Google and Facebook to understand the kinds of content these people interact with and push out, what kind of music they like, etc. Familiarize yourself with the publications and information sources of their trade. Learn to think like them. Then, and only then, should you fill out the customer personas.

How It All Fits Together

Once you’ve sorted all this out, you’re ready. For each potential segment (and the sub-segments you’ve identified and fleshed out), you have new valuable data that you can use in conjunction with your analytic insights. Of course, this data are more like a  hypothesis, and as you test them in your marketing, on social, and in Adwords, you’ll need to amend them to produce the results you want. But once you’ve done all this work, you have clear targets, clear insights on the channels you need to leverage to get them, and a map of their mindset to leverage. Use this info, and go forth to be the marketer you always wanted to be.

While not a segmentation tool per se, CircleBack can offer help offer insight into which personalities fit which kinds of jobs. Scroll through your address book looking at titles, and notice the trends–the kinds of people you know who fit the personas you’re after.

 

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