Customer segmentation is a marketing term used to determine the shared characteristics of a brand’s most profitable customers and which segments have the most growth potential. The shared characteristics of these groups are based around common interests, economic status, race, age, and location profiles, and even similar lifestyle and behavior choices. Advertisers tend to see a positive response and get the most Effective advertising through customer segmentation.
While this term has been around since advertising began, the concept of hyper-segmentation has grown since the 1980s and the emergence of digital communication. Cell phones, Social media and working from home have increased the amount of data that marketers have at their fingertips to define and understand their target audiences. However, often it can still be hard to reach. In some cases, narrow, hard-to-defined cluster segments can be most effectively reached through existing media types that already have a pre-existing mode of reaching a specific niche audience. Magazines and Newsletters exist for this very reason and are often the most effective way to reach small local audience. When coupled with digital advertising, direct response print campaigns and radio advertising can be the most cost-effective way to drive traffic to websites and brick and mortar store locations.
How do Identify a customer segment?
There are a number of ways Advertisers can target a customer segment of people based on characteristics that make them ideal clients. The most successful way is to pinpoint the media consumption behaviors that the audience you are trying to reach has. Most of the time, Customer segments have specific behaviors that they repeat, which includes what media they use and how they are influenced.
Simultaneous media streams and constant multi-tasking leave audiences inundated with ads. Now more than ever, audiences are caught in a conundrum of wanting to take in large amounts of media and trying to be more mindful about who, why, and how they are exposing themselves to. Traditional media often becomes an outlet where people are willing choosing to turn towards versus away from.
While people do love novelty, People still prefer what is familiarity, especially in times when there are a lot of unknowns. For the majority of advertiser customer segmenting is a productive way for create more profits by focusing on their existing customer base and continuing to cultivate the values that are important to them. Audiences tend to vary a great deal based on location and demographic factors and many case studies have shown that it can be worth while for advertisers to spot place locally to generate connection with their audience base and build in that relationship long term. This
For more information about effective advertising through customer segmentation or advertising by niche audience see this additional information.