Chapter 1

Market segmentation

Market segmentation fuels all effective marketing efforts. While it’s a basic component of marketing, it’s often underutilized and undervalued because so many people don’t believe in it. Marketers, especially digital marketers, tend to approach the market by guessing at what will work and then testing their theories, but this only works moderately well. Research is needed to prevent wasted time and resources.
The difference is that when you implement market segmentation you can use the wealth of data that becomes available to truly measure your users and to understand the person behind each visit to your site. This enables you to develop customer personas, which are visual representations of a company’s ideal clients based on a combination of qualitative and quantitative data about the target audience.

The idea of market segmentation and the use of customer personas has been around since the Bronze Age, when archeological findings show traders segmented their trade routes along geographical lines. In the early twentieth century, marketers realized that demographics weren’t enough to explain buying behavior. They began exploring how lifestyles, attitudes, beliefs, values, and culture affected decision-making, and psychographic segmentation was born. The concept of market segmentation was first mentioned in 1956 by Wendell R. Smith in an article titled “Product Differentiation and Market Segmentation as Alternative Marketing Strategies,” which was mostly a re-telling of knowledge marketers had used for at least 30 years by then. [1]

Until recently, segmentation has mainly addressed short-term strategies and marketing mix decisions. Since the shift to digital marketing, though, we’ve realized we can apply the concept at an individual level within the customer base. By using data we can create target segments specifically for niche marketing purposes that help us to sell products people want and need, at the time they want and need them.

Why We Created This Guide

The use of market segmentation to create customer personas allows businesses to understand and relate to their customers, so they can do a better job of acquiring and serving them. Marketers segment their audience into identifiable groups so they can develop a specific marketing plan for each group. Segmentation enables you to give your customers what they need and want, when, how, and where they want it. This benefits your company by enabling you to use your resources more effectively, as well as make better strategic marketing choices.

At iPullRank, we believe developing and using data-driven market segments and customer personas is critical to the future of digital marketing. We created this guide to help you understand the importance of these concepts and how to make them work for your company.

Who the Guide Is For

Most companies have made the shift to digital marketing, at least some of the time. Technology and the advent of data make it possible to send personalized marketing communications to current and prospective customers, but many marketers are uncertain about how to use these concepts effectively. We created this complete guide to customer personas for those CMOs, marketers, and anyone else with an enduring interest in marketing. Its purpose is to help you understand the importance and value of segmentation. We’ll explain the difference — and the relationship — between segmentation and personas, and give you a starting point from where you can develop your own customer personas.

This guide will also highlight for you the benefits of effective market segmentation, including making better strategic decisions regarding your marketing, product development, operations, better utilization of resources, and improved competitive advantage. If you need help developing a personalized marketing strategy for your audience, schedule a persona-driven SEO consultation with iPullRank.

Chapter 1

Market segmentation

Market segmentation fuels all effective marketing efforts. While it’s a basic component of marketing, it’s often underutilized and undervalued because so many people don’t believe in it. Marketers, especially digital marketers, tend to approach the market by guessing at what will work and then testing their theories, but this only works moderately well. Research is needed to prevent wasted time and resources.
The difference is that when you implement market segmentation you can use the wealth of data that becomes available to truly measure your users and to understand the person behind each visit to your site. This enables you to develop customer personas, which are visual representations of a company’s ideal clients based on a combination of qualitative and quantitative data about the target audience.

The idea of market segmentation and the use of customer personas has been around since the Bronze Age, when archeological findings show traders segmented their trade routes along geographical lines. In the early twentieth century, marketers realized that demographics weren’t enough to explain buying behavior. They began exploring how lifestyles, attitudes, beliefs, values, and culture affected decision-making, and psychographic segmentation was born. The concept of market segmentation was first mentioned in 1956 by Wendell R. Smith in an article titled “Product Differentiation and Market Segmentation as Alternative Marketing Strategies,” which was mostly a re-telling of knowledge marketers had used for at least 30 years by then. [1]

Until recently, segmentation has mainly addressed short-term strategies and marketing mix decisions. Since the shift to digital marketing, though, we’ve realized we can apply the concept at an individual level within the customer base. By using data we can create target segments specifically for niche marketing purposes that help us to sell products people want and need, at the time they want and need them.

Why We Created This Guide

The use of market segmentation to create customer personas allows businesses to understand and relate to their customers, so they can do a better job of acquiring and serving them. Marketers segment their audience into identifiable groups so they can develop a specific marketing plan for each group. Segmentation enables you to give your customers what they need and want, when, how, and where they want it. This benefits your company by enabling you to use your resources more effectively, as well as make better strategic marketing choices.

At iPullRank, we believe developing and using data-driven market segments and customer personas is critical to the future of digital marketing. We created this guide to help you understand the importance of these concepts and how to make them work for your company.

Who the Guide Is For

Most companies have made the shift to digital marketing, at least some of the time. Technology and the advent of data make it possible to send personalized marketing communications to current and prospective customers, but many marketers are uncertain about how to use these concepts effectively. We created this complete guide to customer personas for those CMOs, marketers, and anyone else with an enduring interest in marketing. Its purpose is to help you understand the importance and value of segmentation. We’ll explain the difference — and the relationship — between segmentation and personas, and give you a starting point from where you can develop your own customer personas.

This guide will also highlight for you the benefits of effective market segmentation, including making better strategic decisions regarding your marketing, product development, operations, better utilization of resources, and improved competitive advantage. If you need help developing a personalized marketing strategy for your audience, schedule a persona-driven SEO consultation with iPullRank.

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