What First Time Business Owners Know About Market Segmentation
If you own a business, big or small, there’s a pretty good chance that watching the news makes you nervous. Everyday seems to bring up a whole new set of circumstances that makes running a business tougher. Nonetheless, there are enterprises that are doing OK and some are even thriving. What’s their secret? Two words — market segmentation.
Now, there’s one major thing to keep in mind: market segmentation is nothing new. In fact, it is one of the preeminent tools used by businesses of all sizes to get traction on new products/services they’re offering. As such, if you read the term, raised an eyebrow, and said, “Huh?” under your breath, it’s highly likely you’re not taking advantage of this proven marketing approach.
Why Market Segmentation?
Every business owner out there is under the impression that they know their industry and their clientele better than anyone. Many of these owners feel they are the be-all-end-all path to reaching the right folks for products/services offered. To be fair, a lot of business owners have the right idea…early in the process. They’ve put in R&D work & hit the pavement trying to reach friend, family, and neighbors. If they’re particularly savvy, they’ve invested time into a social media, and overall online, presence.
But there is one question that many of these same business owners fail to ask after these efforts — how many clients/customers did I actually attract? There’s something to be said about the first few folks that take a leap of faith in your operation. However, you need more than just a wing and a prayer to keep the lights on. If all of your work getting the word out didn’t net you much traffic (in-store or online), you’ve ultimately wasted valuable time and money. That’s the cardinal no-no of business.
The Truth About Being in Business
Can’t get enough ice-cold water to the face? Here’s an important thing for first-time business owners to hear and digest — not everyone is into you. It’s a brutal assessment in a relationship and a tough thing to hear in business. However, at the end of the day, your product/service(s) will not appeal to 100% of the population. So, stop trying to get EVERYONE to be your client/customer. Much like the word ‘fetch’, it ain’t gonna happen!
If you’re a business owner, there’s at least one thing to take to heart NOW and FOREVER — data is king. You need to run numbers and find out all you can about your prospective market. The ins and outs of how folks live, work, shop, and act are all bits of data you use to your advantage. This info is usually broken into a few categories: 1) geographic; 2) behavioral; 3) demographic; and 4) psychographic. It’s a rabbit hole to be sure but one totally worth getting lost in.
As with all numbers, you have to be ready to do the following: testing and measuring. Keep in mind that your audience (market) will go through changes. These fluctuations all have an impact on how your data presents itself. You can’t sit back and just operate ‘set it and forget it’ style. You and your team need to be committed to actively interacting with the numbers so that you can make decisions on what a next step will be.
Don’t Lose Focus
Of course, it’s important to remember that while market segmentation is all about your company’s interactions with data, you can’t forget about your interactions with your audience. Even the best marketing can be undermined if you don’t take the time to connect with the folks who are keeping your operation humming along. Their feedback (positive AND negative) all are fuel for improvement. More importantly, your willingness to listen goes a very long way in developing long-lasting client/customer loyalty, something that can prove to be a lifesaver during leaner times.
MindEcology is an Austin advertising agency who know that the backbone of EFFECTIVE market segmentation is getting the numbers right. They also know that these numbers require the right ACTION behind them. Could your operation benefit from some expert advice? Call us today to find out.