Segment your customers
Only a percentage of the general population will buy your products
or use your services, so the more accurately you can focus on them,
the less your efforts will be wasted. It is a good idea not to aim too
widely with your targets, to avoid spreading your resources too
thinly.
Benefits of segmentation
Segmenting your customers into groups according to their needs
has a number of advantages. It can help you to:

identify your most and least profitable customers

focus your marketing on the customers who are more likely to
buy your products or services

avoid the markets which will not be profitable for you

build loyal relationships with customers by developing and
offering them the products and services they want

improve customer service

get ahead of the competition in specific parts of the market

enabling you to charge a higher price for your products and
services

group your customers by factors such as geographical
location, size and type of organisation, type and lifestyle of
consumers, attitudes and behaviour

use your resources wisely

identify new products

improve products to meet customer needs
increase profit potential by keeping costs down, and in some

areas
Customer management
Because your individual customers have differing needs, it will be
easier to give them what they want if you divide them into groups
sharing similar needs, and adapt to each group.
This will allow you to:

focus on your most profitable customers

customise your products and services for each segment

aim your marketing at each particular group, saving you time
and money
Companies usually either target a large segment with many people
in it or focus on a niche segment, which will have fewer people in it,
but who they can serve well.
How you segment your customers will depend on whether you are
marketing your products and services to:

individual consumers or households - business-toconsumer

businesses or organisations - business-to-business
Business-to-consumer
If you are segmenting consumer markets, you could group
customers by:

location - towns, regions and countries

profiles - such as, gender, age, income, occupation,
education, social class

attitudes and lifestyles
buying behaviour Business-to-business
If you are segmenting business markets, you could divide the
market by:

what they do - industry sector, public or private, size and
location

how they operate - technology, use of your products

how they behave - loyalty and attitude to risk

their buying patterns - how they place orders, their size and
frequency
Market research
To find out about your customers, many businesses conduct market
research. There are two main types:

Primary research - which involves contacting your
customers, and which will give you detailed information about
them

Secondary research - using published market reports and
statistics covering general markets
The main ways of carrying out original research are by:

face-to-face interviewing

post

email or web surveys

telephone

focus groups
Once you have carried out your research, you can then adapt your
marketing to reach customers and deliver the products and services
they want.
Niche markets
Segmenting your customers can help you to identify a niche
market - a specific, well-defined area of your market that has not
been tapped in to by competitors.
How to find a niche market
It is a good idea to look more closely at your markets, in order to:

identify whether there are any market segments that are not
well covered at the moment

think of ways in which you can offer products or services to fit
the individual needs of these segments
Remember… do your research to find out if there is a
demand for you product/service in the niche market – is
there a reason why there are no competitors!?