What is Marketing Segmentation + 6 Examples
Digital Marketing Metrics•
August 9, 2022
Every brand and marketer on the planet must understand what marketing segmentation is and how to use it.
Marketing segmentation is one of the most powerful and valuable tools that marketers have when it comes to creating more robust messaging and offers that reach different audience segments where they already are.
So do you know how to conduct marketing segmentation for every account you manage?
In this post, we’re going to look at what market segmentation is, why it’s essential, different types of segmentation to consider, and how to get started implementing it across a few core platforms.
What is Marketing Segmentation?
Marketing segmentation is the process of dividing up your audience into different distinct segments. You’ll do this based on factors like behavior, demographics, or funnel stage so that you can create relevant messaging for each one.
You’ll then use marketing tools like email marketing software, custom audiences through ad platforms, and even stored knowledge through your CRM to make sure the right messages get to the right people.
Why Marketing Segmentation is a Necessity
If you want to have successful marketing campaigns (and who doesn’t?!), you need to have marketing segmentation nailed down and well executed.
The reality is that every business has different segments of customers.
They’ll use the product to solve different problems, have different objections to overcome, and be at different parts of the sales process.
If you’re selling security systems and monitoring, for example, take a minute to consider exactly how different these two audience segments are even if they’re looking at similar (or identical!) products:
- A local jeweler who just set up a new shop and wants to monitor their store. They lock everything up in a safe at night, but they’re worried about people trying to do “smash and grabs” to rob them during working hours. They need hidden emergency response buttons, cameras that can capture the faces of customers looking at the jewelry cases, and cameras at the front door. They are trying to find the best quality service.
- An existing customer of two years who uses your home security doorbell and over-garage cameras to protect their home. They’re worried about stolen packages, but they also want to be able to check the cameras for the bears known to roam through the neighborhood before they take the trash out at night. Affordability and consistency is important to them, so they don’t pay for professional monitoring— just the cameras.
These are two completely different audience segments, even if both are looking at one of the same exact products— the front-of-building camera. They need different services and are using it for completely different purposes.
They’re also at different stages of the digital sales funnel.
You don’t want to send someone an intro offer with a great deal when they’ve already been paying full price for two years— especially if they never got an offer that good. Not only is it irrelevant to them, it might just annoy them.
The 6 Types of Marketing Segments You Need to Consider (& 6 Examples!)
There are so many different types of marketing segments that some brands may have, but ultimately there are six core types that most brands will need to account for.
Let’s take a look at each one (with examples!).
1. Behavioral Segmentation
Behavior segmentation will break down your audience into different segments based on both online and offline behavior.
Examples of different behavior include:
- How often they purchase
- What they purchase
- Which site pages they view
- Which lead magnets they download
- What offers they claim
- Which ads they click, and which videos they view
- What social media channels they follow
- Which features they engage with in SaaS platforms
- If they’re engaged or disengaged
Behavioral campaigns, when you’re using automated marketing tools and analytics, can be used to reach customers immediately or soon after they take a specific action.
The email below is an example of behavioral segmentation.
I had signed up for a free trial through a SaaS tool, and they reached out because I wasn’t engaging with the platform and using its most significant features. This was a direct email— not an automated one— but it was still made possible because I was put into a “behavioral box” and it triggered a response.
2. Demographic Segmentation
Demographic segmentation groups different audience members into categories based on information like the following:
- Languages spoken
- Whether or not you’re a parent
- Renting vs owning a home
- Owning or leasing a car
- Education level
- Income level
Demographic segmentation is tricky. It can be misleading, and not necessarily quite as precise for some brands as something like behavioral marketing.
That being said, for eCommerce brands or for specific brands that rely on certain demographic data (like a realtor wanting to know if you’re renting or owning), it can be a great starting point to connect with the right audiences.
In the example below, Madewell sent me an email showing me women’s shoes. Even though they have men’s and women’s clothing, I purchased women’s clothing in the past, so I received emails exclusively for women’s products.
3. Location Segmentation
Location segmentation will break up your audience by where they live (or where you’re able to offer services to them, in some cases).
Some businesses won’t need to worry about location segmentation. If you’re selling floral bouquets year-round online and you can ship to every single state, there’s not much point of location segmentation for your business.
If, however, you can’t ship bouquets to Alaska or Hawaii, you’ll want to exclude them from seeing your ads in search results or on social media. It’s pointless (and very quickly expensive) to get clicks from users who literally cannot become customers.
Some businesses also have products or services that they can only deliver to certain areas, or that they may need to charge extra fees outside of that.
This brings us to our example of location segmentation: If I search for a plumber, I need to find someone local; an expert two states over can’t help me. Many will have a radius set up so they can only have ads shown to customers within their work radius.
4. Funnel Stage Segmentation
At any given point in time, users are going to move through different stages of your digital sales funnel.
An established brand will likely have new leads signing up for lead gen offers, customers making their first purchase, and some customers in the lifelong advocacy stage after years of purchasing.
It’s crucial to reach users with messages that align with the stage of the sales funnel they’re currently in.
Keep the following in mind:
- Customers in the discovery stage of the sales funnel need product education; they need a solid introduction to what your products have to offer and what makes you unique
- Customers in the research and consideration stages need reminders of why your products or services are superior to the competition; overcoming objections is important
- You can entice warm leads or contacts to purchase with the right coupon code or offer at the right time
- Re-engagement campaigns for existing customers can keep customers purchasing so they don’t disengage
- You can use campaigns to engage dropped-off customers with high-value discounts and promotions of new products or services that they may be a fit for
Here’s a good example of two similar ads that are targeting people at different stages of the sales funnel.
I’ve purchased from The Reset before. As a result, the messaging reminded me of the benefits of their products (made to mix and match), and then showed me multiple products I had viewed online before.
You can see the difference in this ad below, which is from a company I’ve never seen an ad from before. They make sure to stress their USP and core features— super soft and stretchy, machine washable, wrinkle resistant, and carbon neutral, along with free shipping and returns. As a new customer, I need to know their brand offers these features to be interested.
5. Use Case Segmentation
Different users are going to use your product or service in different ways.
Someone who purchases a punching bag for their home gym to use two times a week is going to have different concerns than someone who wants to purchase the punching bag for their kickboxing studio, where it will be bashed on for six hours a day every day.
The home user might be more worried about where it will fit and ease of set up; the gym member wants to know about warranties, long-term quality, and how much it will hold up. Both may be worried about affordability, especially since the gym owner will need to buy in bulk.
Segmenting users by how they plan to use the product— or what pain points they have, the products they need to solve, and the objectives they may have— is an important strategy. It’s particularly crucial for B2B brands or B2C brands that sell to both consumers and businesses.
You can see a great example of how relevant this is on Calendy’s site below. They have different pages that detail how different customer segments can benefit from the tool, with landing pages for individuals, teams, and enterprises along with different industries (sales, recruiting, customer success, and marketing).
6. Combined Audience Segmentation
This last segment isn’t a true segment in and of itself, but it’s important to consider.
You can create unique audience segments by combining different groups together. This is something you’ll do internally to really hone in on hyper-niche segments so you can send them the most relevant messages possible.
You could, for example, see that you have a large number of customers who are homeowners in the Denver area but who aren’t currently taking advantage of your home monitoring services. You realize if you had at least 10 customers sign up for home monitoring, it would be cheap to install the new equipment, and if 20 customers signed up it would pay for itself.
You target customers with ads and emails with special offers for free installs and three months free of professional monitoring services. You only extend this offer to existing customers who already use your home security cameras but don’t use your service, and you target those who have purchased from you within the past three years and who regularly open your emails.
How to Implement Marketing Segmentation
Knowing which audience segments is one thing— you also have to figure out how exactly to reach those specific categories of customers.
The first step is to have a quality CRM tool that will allow you to create segments and both manually and automatically group individual users into different categories. You can then use automation software like Zapier or native integrations to push that data to third-party marketing tools.
Once you have this in place, you can use different features on marketing platforms to target the right segment for each campaign. Let’s take a quick look at how to do this on Facebook, Google Ads, and email marketing.
Facebook Ads allows you to set up audience targeting through a variety of different custom audiences.
Options include the following:
- Uploading a list of customers based on segments you download from your CRM
- Retargeting users automatically based on activity on your site or mobile app
- Retargeting users based on their activity in-app, including view views or posts interacted with
In order to access the retargeting features, make sure that you have both Facebook’s conversion pixel and Facebook’s Conversions API installed. The tracking pixel is the first step to capturing this data, but its effectiveness has been reduced some since the iOS14.5 update made tracking a little more difficult. The Conversions API has resolved that issue.
Google Ads has multiple different targeting options available.
Search Ads allow you to set up “recommendations,” which means that you show your ad to anyone who searches for your target keywords but bid more on the audience segments you’ve created. You can also choose to have your ads shown only to users who meet the criteria you set.
When it comes to Display Ads, there are a variety of targeting options available. You can target users based on buying behavior (like whether they’re in the market for a new car) or have your ads only show up on specific types of sites (like beauty websites). This can help you effectively reach your target audience.
They can even let you show ads to women who have birthdays in August and who purchased in the last year and who opened your last email if you choose to.
These options are all available while setting up your email campaign, making them accessible and readily available.
Proper marketing segmentation will take your marketing campaigns— and your business!— to new levels of success when implemented correctly.
It can also help you better understand who your customers are and why they’re really choosing to purchase from you time and time again. This helps your marketing team, your sales team, and even your product development teams so you can better serve your customers in the future and keep them around even longer.
Need help with marketing segmentation? We can help! Schedule your free audit here!