April 29, 2014

How to segment your market

One of the most frequent problems you'll find in marketing is people making content that is way over the heads of the people they’re trying to reach. They use words that no laymen knows and write about the minut details of their industry. Don't get me wrong, It can be fascinating if you know what they’re talking about, but chances are their target market isn’t people who know that much about the field they’re looking into. Let's not do that. Instead, before we write anything or design anything, take a moment, step back, and ask, “who am I writing this for?”

The key Idea of all this is that we need to look at our marketing through the eyes of the people we’re actually designing the marketing for. It doesn’t actually matter at all what you think of it, it matters what your target thinks of it. No matter what you do, you need to make sure your marketing addresses your customers.

Whenever I write an article or an email, I first have to take a step back and think, “Remember Jeremy, you aren’t writing this to other experts in the field. You’re writing to your customer.” The easiest way to do this is to create a customer avatar.  

Ever since that movie, the word ‘avatar’ has taken on a bit of a strange connotation, but it’s simply a fake/imaginary person. For our purposes it’s a representation of the typical person we’re trying to reach with our marketing, and it’s who you try and reach with all marketing. Let’s look at an example:

Meet Adam, he’s my customer avatar for AppliedDataLabs.com
  • He’s a 35 year old executive who is busy at work and outside of it.
  • Lives in the suburbs with his wife and two kids.
  • Has a degree in Business Management and is in the upper middle class.
  • Likes watching sports and occasionally goes golfing with friends or clients
  • He knows a bit about the value offered by data science and wants to harness it for his  division.

This basic customer avatar informs the way I write and design marketing content for Applied Data Labs and helps me remember I’m not marketing to someone who knows just as much as I do about data science. That’s the idea, just as you converse differently with a twelve year old than you do with your coworkers, you also need to be careful to keep your market in mind when designing your advertising.

Designing your Avatar

So I guess the question then is who is your target customer? With the targeting opportunities now at our fingertips, this is a more important question then ever. If you decide your target market is 35-45 year old women who are in business and like Benedict Cumberbatch , believe it or not, there is a way to target just them! Narrowcasting to just those customers you know are likely to respond is easier than it has ever been.

But before you can target your customers, you need to figure out who they are by exploring their demographics and psychology. This is easier than in sounds.


Whenever a form asks for your age or occupation, it’s asking about your demographics. Demographics are largely the facts about your customers that help you put them in their larger context. It teaches us a lot about how we can reach our target markets.
Regardless of what you’re selling, you’re likely to find that certain age groups are better customers than others, and age is actually a remarkably good indicator of where people hang out online. As far as a demographic indicator, it is definitely one of the most useful.
Is your company geographically limited in any way? If you can’t ship overseas or if you are a brick and mortar store, then you’re going to want to define the locations where your possible customers reside. Even if you aren’t location based you might find that certain areas or types (country, suburbs, city, etc.) of locations are better customers than others, you should make note of that.
Even if you’re not a bowtie or yoga pants manufacturer, gender can affect how you do your marketing. We all respond differently to certain types of marketing messages. So in defining your target market, you’re going to want to consider the gender of your customers.
Income level
Are you more of a Walmart or Saks Fifth Avenue? Defining what income level is most likely to want and be able to afford your services is something you don’t want to miss. Peer pressure is a big part of this as well, people in different income brackets have expectations placed on them by their friends.
Education level
There’s some interesting studies about the effect of education on happiness and spending habits (http://www.nber.org/chapters/c3699.pdf). You can take advantage of this if you identify which education levels are most likely to want what you have to offer.
If you’re a business-to-business (B2B) company, this will be an essential demographic tool for you. Are your users executives or IT? Is it industry specific?

For business-to-consumer (B2C) companies, this can be an important consideration if you’ve found that people in industry X need your product. For example, this B2C company I consulted with found that Nurses were one of their primary customers; we were able to target them and got a good return on investment because of that.


One of the reasons I love marketing is because it’s such a diverse field. Psychology is one of the interesting fields that you’ll need to think about while marketing. Once you know your customers demographics, you need to talk about what they are like. The facts about somebody really don’t tell the whole story, and that’s where psychology comes in.
Now you don’t need to know your customers Myers-Brigs breakdown, but if there are defining personality traits, you might want to think about them. Are they outgoing? Driven?
This is actually a more important question than most people realize and will dramatically impact the way you do your marketing. What does your customer actually care about? Depending on what you’re selling this could point you directly to why they’re coming to you.
Hobbies/ Activities
When your customer gets a chance to do what they really love doing, what is that? It’s not a bad idea to round out your customer avatar with details about what you would expect their hobbies to be; it will give you clues about what examples to use and metaphors will work with your customers. And if you’re selling a hobby related product, then you’re definitely going to want to include that in the avatar.

This is by no means an exhaustive list of criteria to consider, and depending on what you’re selling you might want to include other things like ethnic background, height and weight, etc. But it should provide a basis for you to consider while thinking about the rest of this chapter; when we’re talking about demographics or target markets, we’re talking about these types of classifications.

Understanding the breakdown of your target market in this highly defined way truly helps focus your marketing in the most effective way. Because we can laser focus on the people we want to market to, developing a clear picture of who your customers are is the best place to start.

Often we make the mistake of thinking our target market is “Anyone interested in my services or products.” Or we might narrow that down to business owners, stay at home parents, or people who commute to work. But given what we know about our ability to narrowcast, all of these are just too general.

Let’s say for instance you’re a civil war era clothing manufacturer. “Anyone interesting in your services” would include a family putting the finishing touches on their Halloween costumes, and that random hipster who thinks a Civil War soldiers hat will make him the bell of his barista ball. However, those groups aren’t the ones you want to market to; you want to spend your marketing dollars where you’ll get the best return. Instead of focusing on “anyone interested”, you want to narrowcast to the customers who provide the best return, namely Civil War re-enactors; they will keep coming back and tell their friends.

It is not that defining a target market excludes people that do not fit the profile, the hipster very well might find the hat he needs here. Rather, developing a target market allows you to focus your marketing dollars on a specific market that is more likely to buy from you than other markets. Doing it this way saves you time and money as it is straight up more effective at converting your marketing dollars into paying customers.

For example, instead of just targeting simply ‘homeowners’ with their marketing, an interior design firm can target homeowners between 35 and 65 who make more than $150,000 and live near the design company’s headquarters. Sure, all of their clients are going to be homeowners and they could just target them, but why not spend your money looking to those with the highest likelihood to buy?


Before we go any further in this, it is important to note that business’ can have more than one target market. I mean, let’s say that hipster buys a civil war hat and starts a massive trend. If that happened then it would be worth the manufacturer's time and money to put an ad on Pitchfork.com, and thus a new segment would be born. He wouldn’t stop marketing to Civil War re-enactors by any means, but would split his marketing budget to maximize return on investment.   

One reason the internet has changed the marketing game is that it has enabled us to track and analyze how effective our marketing dollars are; it isn’t a guessing game anymore, it isn’t hope marketing. So the reason we call these different target markets ‘segments’ is because we keep them separate from each other from start to finish of the marketing funnel. You send them to different pages on your site, and track them separately. In keeping the different groups truly segmented, we can see how each group is doing and pinpoint the most cost effective marketing strategies.

Segmenting isn’t only about find the most effective target markets though, it is also about providing the people in those segments with exactly what they’re interested in. Going back to the civil war example, within the re-enactors segment, the company would further split that group into North and South. This would enable them to show the people who play northern soldiers only North uniforms, and thereby make the marketing that much more focused on what the customer is actually looking for. It’s the same for other companies as well; the more you can segment out your target markets the easier it is to provide the perfectly tailored message for the audience you’re reaching.

If you’re running a business to business company, you’ll probably have an executives segment, specific department segment, and an entrepreneur segment along with some others. If your product allows, you might be able to segment these out even further by splitting the executives segment into finance, information, corporate, etc. Each one of these groups is going to want something different from your relationship; each one is coming to you for different reasons. Segmentation, keeping the groups separate, allows you to always speak to the needs of the specific segment you’re marketing to. So while we work on identifying your target market, just know that you should think about the needs of each segment you can identify.

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