I have a marketing colleague who plays basketball. He likes to say, “When I shoot baskets, they either go in or they don’t.” This existential philosophy might work well on the court for him, but it doesn’t work in marketing, especially for market segmentation.
Market segmentation is a key concept in economics and marketing. A market segment is a sub-set of a market made up of people or organizations sharing one or more characteristics that cause them to demand similar product and/or services based on qualities of those products such as price or function. It helps guide ‘who’ and ‘how’ we sell and market to those prospects. In previous posts, I’ve indicated 90% of marketers use only demographics such as company size or SIC code for segmentation. They do this because other forms of segmentation are more difficult. The result is that they have to take a lot more shots to make one basket.
I believe there is a hierarchy to levels of segmentation, and there are levels that are much more productive than demographics. The hierarchy from less productive to more productive levels of segmentation and from easy to difficult is:
- Demographic
- Buyer
- Persona
- Behavioral
- Narrative
Buyer segmentation provides the function and role for who is being sold. Are you selling to the VP of Finance or to a tax accountant, a decision maker or an influencer? At this level of segmentation you know the team you are playing and their record.
Persona segmentation provides a personal profile of the prospect. Is the prospect male or female? Are they analytical or creative? Are they successful and ambitious, or content and amiable? The persona creates a picture of the typical prospect. Knowing a prospect’s persona helps marketing tailor specific messages to that prospect. For example, if you sell to HR it might be helpful to know that the typical VP of HR executive is female (73%), is between 35 and 45, has two children, drives a crossover and also volunteers at school. This is the equivalent of knowing the style of the team you are playing on the court.
Behavioral segmentation is based either on the actions a prospect takes or how they behave. For example, behavioral segmentation could be based on those that buy on quality and those that buy based on price. Or with today’s email systems, it could be based on the frequency with which a prospect downloads information, the type of information in which they are interested, or which web pages they hit. At this level you know the typical moves of the individual players you are playing against.
What you don’t know at this point is what the opposing players are thinking. In this case, thinking means what they are thinking unconsciously, because no athlete stops to consciously think, “I will drive to the left, then stop and fake right, but continue left.” As close as we can come is determining the narrative they are playing out in their heads. Is it one of victory or one of trying not to lose? At this level you are inside your opponent’s (or prospect’s) head. You know things that they don’t know because you understand their particular story and the stories that form their culture and their history.
Lee Stocking
Prairie Sky Group
Driving Sales Through Customer Focused Marketing
lee.stocking@gmail
651-357-0110