Market Segmentation - A Quick Guide - Comalytics (PTY) LTD

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Market segmentation – a quick

guide
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Knowing your customer is one of the cornerstones of any business. This post is for you
if you want a basic understanding of how to do market segmentation and, taking that
one step further, create customer personas for your business.
This is one of a series of blogs intended to assist you in growing your online business.
To prepare to create a winning e-commerce website (http://comalytics.com), you need
to address 4 key elements.
4 elements to create a website for growth

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In related posts, we discuss the other elements:
How do you establish and align business, digital marketing and website goals
(https://www.comalytics.com/?p=1392&preview=true)?
Mapping customer journeys (https://www.comalytics.com/?

p=1408&preview=true) helps identify potential improvements in how you interact
with your customers, whether via your website or other initiatives.
Creating a brand style guide (https://www.comalytics.com/?

p=1412&preview=true) ensures that every message you put out there about your
company is consistent.
Let’s dive right into this post.
What is market segmentation?
Market segmentation is the process of dividing your existing and potential customers
into groups with similar characteristics. Customer segments are clusters of customers
that have similar needs in terms of your products, behave similarly when they buy from
you, or have similar communication preferences.
Tel: +27 (0) 21 789 0201 (tel:021 789 0201)
Why is market segmentation important?
The most effective way to sell to customers is to meet their needs. You unfortunately
cannot meet every customer’s individual requirements, but you can focus your
attention on groups of customers that have similar ones.
There are a few key things you can do better if you understand your different customer
segments. You can:
Identify the most and least pro table customers and treat them differently
Better focus marketing efforts on different segments

Develop products suited to speci c segments
Price products differently and appropriately for different segments

Train your organisation
(mailto:info@comalytics.com) to better serve customers based on their needs
Build loyal relationships with customers

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Create personas to help partners and employees understand the different

segments
How do customer segments translate into customer

personas?
Once you’ve categorised your existing and potential customers according to pre-
de ned criteria, and grouped them into more or less homogenous groups with similar
needs and behaviours, you have created customer segments. Then you can take that
one step further by creating customer personas to represent that segment.
Customer personas are more than just a brief summary of your target customers. They
are fully developed, thoughtfully cultivated portfolios that help you better understand:
Your buyers’ needs;
Their knowledge of your products and services;
How they consume media;
Which communication channels they prefer;
Who in uences their buying decisions; and
How they will respond to different messages.
While most businesses develop buyer personas, many of them make the mistake of
building so many details into the persona’s backstory that they miss the bigger picture.
To be truly useful, the focus should be less on personal habits and more on the
motivating factors that in uence how they:
Decide what they want
Convince themselves that they deserve it

Make a plan to get
(mailto:info@comalytics.com) it
Personas can be as simple or as complex as you want them to be. What’s important is
Tel: +27 (0) 21 789 0201 (tel:021 789 0201)
that you build them using real customer data gathered over time, combined with
interviews with current or prospective customers.
How to segment your customer base and build

personas
Step 1: Gather data
You need to gather as much data as possible about your customers. You can do this:
Using historical sales data;
Through your web analytics software, such as Google Analytics;
Through your social media analytics;
By running surveys using the analytics data already gathered; and/or
By interviewing customers directly.
You will use this initial information to look for patterns that point to clear and relevant
criteria for your business to use as a basis for segmentation.
Step 2 : Clarify your criteria
While demographics are useful to an extent, they are outdated as a basis for creating
personas. It’s far more relevant today to cluster customer segments around online
purchase behaviour or needs/problems speci c to your product.
Bear in mind too that your core market segments should be unique to your business.
So consider using only criteria that help you understand your customer’s behaviour
related to your speci c products.
The diagram below gives
(mailto:info@comalytics.com) an idea of the kind of information you are looking for.
Tel: +27 (0) 21 789 0201 (tel:021 789 0201)
Digital sharing: MasterCard identi ed 5 types of digital sharers:
Passive users: Sceptical of the internet and spend the least time online
Proactive protectors: Make full use of their privacy settings to guard their
private information
Solely shoppers: Use the internet for product research and clever purchasing
Open sharers: Most digital of all consumers and expect bene ts for sharing
their information
Simply interactors: Not very tech-savvy, but the most dedicated social
networkers
Once you have gathered your data, and clari ed your business-speci c criteria, group
your ndings in segments on a spreadsheet. Aim to cluster customers that act similarly
based on your criteria. Although you may need professional statistic analysis if you
have
Email: large amounts of data, you know your customers and have a good chance of
info@comalytics.com
uncovering patterns yourself and creating some hypotheses.
As you build up data on different characteristics or behaviours, patterns of possible

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relationships between the pro les of customers and their needs will become clearer.
At this stage you should have roughly shaped segments (hypotheses if you will)
outlined in a spreadsheet.
Step 3: Conduct further investigation to con rm your data
Now that you have an idea of some potential customer segments, it’s time to get out
there and interview a small sample of customers, or prospective customers, who
roughly t the pro les you have so far.
If, for whatever reason, you cannot establish a face-to-face, telephonic or Skype
interview, you may want to recruit customers for an interview or survey while they are
interacting with your site. There are many low-cost Voice of Customer
(http://www.conversion-uplift.co.uk/voice-of-customer-tools-for-conversions/) tools,
such as Hotjar (https://www.hotjar.com/), available for this.
Once they’ve agreed to the process, arrange for a Skype call or web meeting to conduct
your interview. Draft a short discussion guide beforehand to make sure you’re asking
everyone the same questions, but keep most of the questions open-ended to allow
users to express their opinions. Some examples might be:
Why do you buy product x?
What do you enjoy most about our products?
How do you choose which brand/book/product to buy?
Why would you not buy our product?
What annoys you about the process of buying xyz?

Through which channels would you prefer to hear about new products or
specials?
Which competitors
Email: info@comalytics.com would you consider and why?
The aim of this step is to gather data that can validate (or invalidate) your hypothesized
segments and also build a deeper understanding of their needs and behaviours.
Tel: +27 (0) 21 789 0201 (tel:021 789 0201)
Step 4: Re ne your market segments
Once you’ve conducted your interviews, update your spreadsheet with any new
information, adding depth to the personalities and buying styles of the various
customer segments. You may even nd you need to make changes to your segments
as a result. Try not to create too many different segments though, unless it’s very clear
that each group is reasonably large and that differentiating them is important to the
success of your business.
The results at this stage may look something like this:
Step 5: Create your personas
You’re nally ready to create persona frameworks (and micro personas if need be) that
can be used to describe your customers. There are many great tools available to help
you do this. Some of the best ones include:
Xtensio: (https://xtensio.com/user-persona/) This is a free buyer persona creator tool
that you can use to build as many personas as you like. Highly recommended for
individual business owners.
Userforge: (http://userforge.com/) This
(mailto:info@comalytics.com) is one of the most exible tools available to
collaboratively develop comprehensive user personas. Highly recommended for teams
Tel: +27 (0) 21 789 0201 (tel:021 789 0201)

Both your segments and persona comparison should be handed to your web design
company in order for them to create a winning website
(https://www.comalytics.com/products/) for you.
The result of the persona work will look something like this:
Customer Persona Comparison for a ctitious online bookstore:

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Each persona will have a detailed pro le explaining their needs and preferences, much
like the two examples below.
Tel: +27 (0) 21 789 0201 (tel:021 789 0201)

Tel: +27 (0) 21 789 0201 (tel:021 789 0201)
Using a tool that works for you, create a persona like the one above for all your
customer segments.Depending on how much data you have available, each pro le may
be more or less detailed. As you discover more about your customers, you can always
add to their personas, and it’s a good idea anyway to re ne them periodically.
The bottom line
Many business owners assume they already know who their customers are and what
they want. If you’re planning to grow your business, it’s truly worthwhile to check your
assumptions with some thorough research on your market segments.
Remember that you’re aiming to understand how your customers use your products,
their buying behaviour on your website and their preferred communication channels. So
be sure to build your personas around these attributes, especially as you will need them
for the
Email: next step of mapping your customer journey.
info@comalytics.com
Please let us know of any tools or tricks you may have found useful in segmenting your
customers?
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Get in touch (/request-free-consultation/)

Market segmentation – a quick

4 elements to create a website for growth

Tel: +27 (0) 21 789 0201 (tel:021 789 0201)

In related posts, we discuss the other elements:

Mapping customer journeys (https://www.comalytics.com/?

Creating a brand style guide (https://www.comalytics.com/?

Let’s dive right into this post.

What is market segmentation?

Tel: +27 (0) 21 789 0201 (tel:021 789 0201)

Why is market segmentation important?

Better focus marketing efforts on different segments

Price products differently and appropriately for different segments

Build loyal relationships with customers

Create personas to help partners and employees understand the different

How do customer segments translate into customer

Your buyers’ needs;

Their knowledge of your products and services;

How they consume media;

Which communication channels they prefer;

Who in uences their buying decisions; and

How they will respond to different messages.

Convince themselves that they deserve it

How to segment your customer base and build

Step 1: Gather data

Using historical sales data;

Through your web analytics software, such as Google Analytics;

Through your social media analytics;

By running surveys using the analytics data already gathered; and/or

By interviewing customers directly.

Step 2 : Clarify your criteria

Tel: +27 (0) 21 789 0201 (tel:021 789 0201)

Digital sharing: MasterCard identi ed 5 types of digital sharers:

As you build up data on different characteristics or behaviours, patterns of possible

Step 3: Conduct further investigation to con rm your data

Why do you buy product x?

What do you enjoy most about our products?

How do you choose which brand/book/product to buy?

Why would you not buy our product?

What annoys you about the process of buying xyz?

Step 4: Re ne your market segments

The results at this stage may look something like this:

Step 5: Create your personas

Tel: +27 (0) 21 789 0201 (tel:021 789 0201)

Customer Persona Comparison for a ctitious online bookstore:

Tel: +27 (0) 21 789 0201 (tel:021 789 0201)

Tel: +27 (0) 21 789 0201 (tel:021 789 0201)

Tel: +27 (0) 21 789 0201 (tel:021 789 0201)

The bottom line

Share this content!

Tel: +27 (0) 21 789 0201 (tel:021 789 0201)

Use us to change your game

Your Name Email Tel. No Send my request

Village Lane, Loft 1, The Cellars, Noordhoek Farm Village

Tel: +27 (0) 21 789 0201 (tel:021 789 0201)

© Copyright 2020 Comalytics

Disclaimer (https://www.comalytics.com/comalytics-disclaimer/) Privacy policy

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