Research into your company’s brand awareness and overall perception in the market is critical for your marketing and your growth, but if that’s all you’re doing, you’re leaving cash on the table. To make your research genuinely productive, you need to go into more detail and study segments within the market, not just the market as a whole.
How do you conduct market segmentation in a reliable yet practical way, and how do you put your findings to use? Our market research experts are here with all the details and how-to’s you need to know.
Why Market Segmentation Matters in Market Research
We truly can’t overstate the importance of market segmentation. You might be extremely well-perceived among one group of people while another group doesn’t even know you exist. If you don’t realize this, you’re likely to continue accidentally skipping that second group in your marketing, missing out on all the revenue they could throw your way.
Market segmentation also helps you customize and target your marketing more strategically so you get a better ROI. All in all, if you perform market segmentation well and use it wisely, it can make every dollar in your marketing budget more profitable.
How to Conduct Market Segmentation
Market segmentation can be complex enough to make your head spin or it can be incredibly simple if you have the right tools. Follow these steps for an easy process with spot-on results.
1. Choose a Survey Tool with Customer Segmentation
You could spend hours coming up with different customer profiles, finding ways to categorize them and questions to ask to identify those categories, and then analyzing survey results to learn about each segment. Or, you could choose a survey tool like GroupSolver which has customer segmentation solutions built in so you can uncover customer segments with ease.
2. Prepare a Market Research Survey
With a great customer segmentation-capable survey tool in your corner, you can start developing your market research survey. Think about the type of information you want to know about any segment of your market: if they’re aware of your brand, what they think about your product or service, their buying habits in your industry, the challenges they face in relation to your product or service, and so on.
3. Ask Demographic Segmentation Questions in Your Survey
To make sure you can segment your survey results, make sure your survey includes specific segmentation questions that are solely for the purpose of categorizing each respondent. These questions could include the respondent’s age, gender identity, income level, number of children, location, marital status, educational background, race, ethnicity, career, and so on.
4. Incorporate Survey Questions to Understand Segments at a Deeper Level
The more information you can learn about your market segments, the more productive your research will be. You don’t just want “yes or no” questions, you want to understand your consumers at a deeper level and find out why they think that they think and do what they do. If you search for generic market segmentation survey examples, most will ask fairly surface-level questions.
The best way to get truly authentic and useful insights is to use an AI-based survey tool like GroupSolver which allows for open-ended questions so respondents can write out their authentic answers instead of selecting from pre-written answers in multiple-choice questions. GroupSolver also has the intelligence to ask follow-up “why” questions to get to the root of your consumers’ ideas and motivations.
5. Analyze and Comprehend Your Results
The right survey tool can do all the heavy lifting for you, and when it’s done, you can dig into your results report to learn about each segment. You can identify different customer profiles and see their responses while comparing them to other profiles to gain a thorough understanding of each segment.
Frequently Asked Questions About Market Segmentation
Still have questions about market segmentation and how it can inform your marketing and brand-building strategy? We have answers!
When Should You Conduct Market Segmentation?
The most obvious time to conduct market segmentation surveys is any time you are starting a new marketing endeavor, such as in the early days of your business’s marketing strategy or as you’re beginning to market a new product or service.
However, keep in mind that each segment is made of growing, changing human beings so the insights you collect are likely to change over time. In fact, data like brand awareness and brand perception should change in your target segments if your marketing is effective. To keep your finger on the pulse, you should repeat your market segmentation research on a regular basis to see how segments have changed or if there are completely new segment breakdowns to target.
What Are the Types of Market Segmentation?
As you break down your market into segments, there are countless combinations of factors and attributes you can combine into each customer profile. The primary types of segmentation include:
- Demographic segmentation: categorizing consumers based on personal attributes like age, race, gender, ethnicity, and income
- Firmographic segmentation: categorizing businesses based on their attributes like revenue and staff size (think of this as the B2C equivalent of demographic segmentation)
- Geographic segmentation: categorizing consumers or businesses based on where they’re located
- Psychographic segmentation: categorizing consumers based on their psychological attributes like their goals, values, opinions, and personality traits
- Behavioral segmentation: categorizing consumers or businesses based on their behaviors like whether they are technological early adopters, how much they spend within your industry, and so on
Keep in mind, though, that your segments can combine demographic criteria with geographic criteria and psychographic criteria, for example, and you can customize your criteria however you choose.
How Can You Use Market Segmentation?
Market segmentation is endlessly valuable in your marketing and brand development. As a few examples, you can use market segmentation to:
- Identify specific segments to target
- Determine what type of marketing to focus on for each segment, such as brand awareness, brand perception, product awareness, and so on
- Customize marketing pieces such as designing different versions of a social media ad to target specific segments based on their values, motivations, and needs
- Identifying opportunities in the form of gaps in the market that you haven’t targeted
This is just a small sample of the ways you can put market segmentation to use to benefit your bottom line.
Getting Started with Market Segmentation
Now that you have a grasp on how to conduct market segmentation, let’s dive in. Schedule a GroupSolver demo today to learn how this tool can revolutionize your market segmentation research.