Many of them categorise their customers into A, B and C type customers depending on their importance to the business. Others might prefer to separate their customer base into loyal, regular customers and irregular customers, or account and non-account buyers.
Others again might choose to separate customers by region or areas that may be covered by an individual field or sales representative. Or there may be a combination of all the above approaches.
Consumer driven companies (B2C) might look to the gender or income of their customer base, while those companies targeting other businesses (B2B) may group their business customers by the number of employees and their revenue dollar.
Irrespective of the method, almost all companies have a hierarchy or means to separate and group customers for their internal reporting, sales and forecasting purposes. This process is referred to as customer segmentation.
There are various and many methods of segmentation, these include:
- Demographic segmentation covers measures such as age, gender, family size, marital status, income, education and occupation.
- Psychographic segmentation refers to personality type, lifestyle, values, attitudes and beliefs.
- Behavioural segmentation can be classified as product usage, brand loyalty, purchase cycle, benefit sought.
- Motivational segmentation classifies reasons for purchase, mindset at time of need.
It is only when you have the customer in mind—at the core of your business thinking—that you separate and group customers according to their buying point of view for marketing purposes.
If you better understand what motivates their buying needs and choice criteria, you’ll almost certainly have a better understanding of how to provide the answer or solution they are seeking.
This motivational segmentation technique assists with targeting because the better you understand what motivates your target audience, the more likely you are to strike a chord with them and create a message or communication that resonates when they need it most. Also, the more you understand their needs and motives, the more accurately you can craft your messaging to meet those particular motivating needs.
We experienced a great example of this when we developed a brand strategy for a company who were launching a brand of high-end, premium automatic car washes in the Australian market. Traditional demographics almost certainly would have created targets along the lines of income status, type and value of vehicle, and place of residence. But by preferring to trust motivational segmentations, it became apparent that many potential users were not in the low to mid-income bracket, did not necessarily drive Japanese cars, nor did they necessarily reside in traditional working class suburbs. In fact, by choosing a ‘time poor’ motivational segment this bridged demographics to bring together a high income, expensive car owner into the same segment as the blue-collar worker.
Had the brand relied on demographics alone, many time-poor owners of more expensive ‘European’ cars would have been missing from all marketing communications.
Having established your motivational segments, you might then choose to add other influencers and attributes to gain a better insight into these potential customers. What else influences them? Who’s opinion do they value? What are their likely values and wishes?