Skip to main content

Defining segments is one quick and easy way to increase the return on investment for your marketing dollars. After all, everyone knows that targeting the right audience is the key to success with any marketing efforts. If you can get even more specific in your targets, you can theoretically get better ROI, clickthroughs, conversions, and repeat business. By splitting existing audiences into even smaller groups, you might find high-value clients or unique customers to whom you can cater with specific ads for a better chance at getting their attention.

When compared to traditional marketing methods, it just makes more financial sense, and more business sense, to maximize your marketing efforts. That’s exactly what segmentation does, and why it should be pertinent to every business that wants to efficiently market their brand and capture better ROI. Read on to learn more about how algorithms and audience segmentation can benefit your advertising strategy.

Segmentation Strategies

There are two main strategies that agencies, including ours, use to segment their customers. Each has its place, as well as its pros and cons to consider:

Concentration Strategy: Focuses on a specific product feature that targets a particular segment or niche. Product details are a focus of many segments, so there are a lot of opportunities for reaching various audiences here. Some examples of this strategy would include Rolex, which targets the luxury watch consumer, and AARP, a company that targets the senior citizen on a budget that needs insurance and other financial services.

Multi-Segment Strategy: This approach looks at details for a single product or several products that will appeal to a wider audience. The most notorious for this are auto manufacturers, like Ford, which markets compact sedans to the eco-conscious budget shopper and models like the Edge Crossover and Mustang to those who have higher incomes or want a more “luxurious” ride without buying a luxury car.

Is one better than the other? Not really. It may depend on your product(s) or service(s). It might depend on your target audiences. Both have their place in a strong marketing strategy, though. The biggest key is to incorporate targeted strategies. The details beyond that are mostly flexible.

Within these two strategies, you’ll also find opportunities for various methods of segmentation, so let’s discuss those.

Methods of Segmentation

In addition to the strategies, you’ll need to think about the types of segments that you’ll want to identify and target. There are plenty of them to choose from, including:

  • Interest-Based
  • Demographic
  • Location
  • Usage
  • Psychographic (personalities, lifestyles, and social class)
  • Behavioral

Interest-based segmentation is exactly what it sounds like: it creates audiences of users that have similar interests. Social media and cross-platform information sharing are improving the opportunities for this type of marketing, too. Demographic and geographic segmentation may also be a good way to go. For example, most makeup products are marketed to women, and for good reason. They are the primary customer, after all, and even if men are buying makeup for women, the women are picking it out ahead of time.

You can also segment people based on their lifestyle, usage, behavior, and even their personality or their interest in impulse marketing. Some people are more susceptible to the latter, offering a unique audience segment that many brands overlook. An example of social class or lifestyle segmentation would be offering financial advising services to millionaires specifically, or the advertisements for budget-friendly meals aimed at young families and those of lower-income status or social class.

Basically, you’ll want to look at your product and determine what kind of people could best use it. Consider each of the categories above and figure out how to maximize your reach by choosing the perfect segments. Speaking of which, you’ll need to come up with multiple segments– as many as you can manage, in fact. The more segmentation, the better chance your marketing has of being successful.

Benefits of Segmentation

First, let’s start by saying that segmentation is no longer optional. If you are going to properly execute a targeted marketing strategy, this aspect must be included.

Now that we’ve covered that, let’s talk about all the perks. We’ve already discussed the basic idea that targeted marketing and using algorithms allows you to increase your ROI and make the most of your advertising dollars. It can also do a lot more for your business. It addresses specific pain points that your consumers have. It helps identify further segmentation opportunities and ensures that you are gaining the best returns for your advertising budget.

Another huge benefit of segmentation that’s often overlooked is that customers love it. Today’s consumer wants that customized, personalized approach– even if they act as if it bothers them that Facebook knows they searched for your product on Google, they’re also going to appreciate that it’s just one click away when they’re finally ready to buy. People don’t want to be watched, but they do want to be catered to. That’s exactly what segmented marketing does.

Take advantage of the growing access that you have to valuable insights about consumer behavior and habits to step up your marketing game.

The Perfect Strategy Can Exist

When traditional marketing methods are no longer working, it’s easy to get discouraged. However, at REIN, we are committed to providing a holistic approach to marketing with experiential tools and techniques to help you create the perfect strategy. We can assist you in identifying audience segments and targeting them effectively, based on a variety of factors or niches.

Put simply, segmenting to capitalize on algorithms can provide you with maximum value for your ad spending by offering a micro-approach to audience targeting that ensures you get the exact right audience every time. With our assistance, we can integrate various segmentation efforts to ensure you reach all of your audiences with ease. Contact the professional team at REIN to find out more and step up your marketing strategy today.


©2021 | All Rights Reserved.