Every business owner knows that forking over hard-earned money for their venture needs to pay off. The problem is that because there are so many bad ways to spend money for your business, legitimate investments in strategies like customer segmentation don’t often happen. When they do, it’s done with a level of mistrust and a lack of patience. Unfortunately, this disconnect in business strategy & implentation can be devastating and prove too difficult to bounce back from.
Going back to the idea of customer segmentation, it’s important to know that for many business owners, trying to break down a target audience to know how best to spend their advertising & marketing budget is actually a pretty tough thing to do. For starters, you have to convince these business owners that not everyone wants their product or service. As crazy as it may feel for any business owner to come to that realization, the quicker it happens, the faster he/she can move on to reach the part of their audience that actually wants what they have to offer.
Imagine for a second that you have a great residential lawn service that even has some extra perks regarding trash haul-off and flowerbed detailing. In your mind, everyone could do with having a lawn service tech come to their home regularly or on an as-needed basis. There’s just one problem you failed to take into consideration — not everyone has a lawn. If someone doesn’t have a lawn, why would they need the product/service you offer?
The next big hurdle to overcome in order to get the most out of customer segmentation has to do with understanding one major issue when it comes to the data segmentation provides — ACTUALLY USING THE DATA THAT’S COLLECTED. If a company is paying for customer segmentation services by way of their own team or through an outside agency, it wouldn’t make sense to sit on the info and ignore it. Sure, there is truth to the idea that some companies don’t want to face certain realities about their operation which are exposed by way of data & research. Yet, deciding to obstain from using such important data happens too often, leading to more time and money to be wasted chasing after hunches & “gut feelings” instead of building off real numbers.
It’s imperative for companies to establish both short-term & long-term goals for customer segmentation. There has to be a discernible direction and result you’re hoping to achieve so that you can actually see if your efforts are working. Constant assessment of progress toward a goal is a major component of successful audience definition strategies.
It bears mentioning that customer segmentation is not one-dimensional & is more than just breaking up audiences into smaller groups; it’s about getting info to support viable business strategies that will yield results. Remember, we’re taking about a return on your investment, and few things in business mean returns like actual results. Also, when it comes to customer segmentation, consider the following:
- you get a better idea of where your customers are located so that your advertising/marketing efforts are directed in the right place
- it leads to greater customer/public engagement which works to creating a better sense of trust & loyalty
- it allows you address & correct mistakes you’ve made with your product/service and show accountability to your audience
Perhaps the biggest advantage of customer segmentation, and what will bring some of the highest return on investment, is having a better grasp on “real” customer personas as opposed to “ideal” personas. Businesses are interested in knowing who actually wants their product/service, not who might be a good fit to want it at some point. In the end, though, the biggest takeaway regarding customer segmentation is that to ensure the best chance of maximizing return on the investment for the strategy, businesses need to be actively involved in the process.