How to segment your market efficiently


Date: 5 May 2022

Image representing market segmentation

One of the most important assets of a successful business can lay in its market segmentation. Something that is easily looked over can be key to a positive outcome in sales and the new user or client interactions. Data from Harvard Business Review demonstrates the importance of an efficient market segmentation strategy - 85% of product launches fail because of the products marketing team's inability to properly implement market segmentation into their customer base.

Market segmentation involves the division or breaking down of your target market into multiple approachable groups, creating subsets of your target market based on behavioural or psychographic criteria, such as wants, needs, demographics, and common interests. By segmenting your target market, you'll be able to identify and understand key sub-groups and create dedicated marketing tools, sales, and products that will help ensure their continued interest in your brand.

Bain & Company conducted a study on the profitability of market segmentation, and 81% of their executives found that conducting and utilising market segmentation was "crucial" in growing a company's profit. Also, they found that over five years, businesses that focused on perfecting their market segmentation strategies had 10% higher profits than companies whose marketing segmentation was conducted poorly.

To segment your market efficiently, you need to know what you're looking for. Below, we offer five tips on how to segment your market efficiently.

1. Use a customer data platform

A CDP is a piece of software that can be utilised to create a database that holds information about your client's touch-points and online interactions with your website, product, or service. For example, a CDP would collect touch-points from social media sites, email interactions, your own company's website, or any other place a potential customer might interact with your company online. The CDP will consolidate all of the information for you to view and use. Once enough data has been collected about your client base, the ways your database can be segmented are almost endless. This database can offer your company a better understanding of customers.

2. Create buyer personas

Buyer personas are pivotal to market segmentation. Buyer personas encapsulate semi-fictional representations of customers your business would target with your brand or product, based on data and research. Understanding your market by creating these personas is also pivotal in content creation, increasing social media interactions, and product development.

3. Understand common types of market segmentation

There are four common types of market segmentation. The first is geographical segmentation. Separating your market by geographical location is beneficial because customers have habits, interests, hobbies, and wants that are specific to their geographical locations.

Psychographic segmentation separates your client base by personality, social classes, and personal lifestyle preferences. Behavioural segmentation looks to divide your consumer base into groups determined by the behaviours they share while making purchases. This will categorise consumers by their usage of products, loyalty, and benefits.

The last and most common market segmentation is demographic segmentation. This form of segmentation divides customers into groups by their age, income, gender, religious views, and any other demographic your company seems fit to consider.

4. Check back bi-annually on your market segmentations

Some businesses make the mistake of letting their market segmentations from 20 years ago dictate their business decisions today. It's important to be constantly checking and updating your market segmentation because even if the core demographics stay the same, small changes in the opinions and habits of your consumer base can call for changes in your marketing campaigns. It's suggested that you should check on your market segmentation bi-annually. This will help you ensure that your marketing techniques align with the wants and needs of your consumers.

5. Don't make segmentation groups too niche

One of the biggest mistakes businesses make when working on their market segmentation is making their groups too niche. When you begin your segmentation, focus on the common types of market segmentation we discussed above to begin to sort out your consumer profiles. Once you've used those four groups, you can look for more complex similarities and differences amongst the groups to narrow down some of your more complicated customer profiles.


Going overboard with your market segmentation can cause you to alienate entire groups in your marketing campaign without meaning to. If you feel your team is struggling with market segmentation, consider hiring a professional to aid in the process.

Copyright 2022. Featured post made possible by Daniel Bailey.

What does the * mean?

If a link has a * this means it is an affiliate link. To find out more, see our FAQs.