Utilizing demographics and segmentation is about qualifying customers, so you are targeting the right people. Let us face it; you have a limited marketing budget to stretch to get the highest ROI. It is about putting offers in front of the people that are most likely to respond. 

Segmented email campaigns have the potential to increase revenue by 760%, according to Campaign Monitor. It makes sense because email recipients are more likely to look for and interact with relevant emails. Continue reading to learn the basics of how you can use demographics to segment customers and reap the rewards. 

What Data to Collect

Before you can segment customers into the list, you need to collect the correct data. The way you collect data needs to be strategic to increase the chances of customers filling out the fields. Use CRM systems, surveys, profile registration forms, and follow-up emails to increase the amount of information you have on each customer. 

Here is a list of data you should collect:

  • Geographic location: Collect geographical data such as city, state, region, and country. It may come in handy when marketing products where the conversion rate depends on the buyer’s location. 
  • Demographics: Information such as income, gender, education, and age is helpful for marketing segmentation. 
  • Psychographics: Learn about your customer’s lifestyles, belief systems, and values to understand their needs better. It helps send the most relevant offer.  
  • Behavioral trendsFind out about customer buying patterns, checkout preferences, and general shopping tendencies. These will improve your conversion rate.  

4 Market Segmentation Implementation Tips

Effective market segmentation comes from having a solid framework. You need to assess the segmentation scope and format to ensure it is aligned with your goals. Here are four ideas for improving segmentation:

  1. Size: Think about the number of prospects available once you have segmented your list. Will there be enough people to justify the effort of creating a customized offer? 
  2. Resources: Do not create too many segmented lists because you might bite off more than you can chew. Consider the resources necessary to optimize for each segmented list. You may want to tackle one segmented list at a time to ensure you do not run out of resources halfway through the campaign. 
  3. Communication: The communication method for each list may differ based on the audience. Find out about the best marketing channels, internet availability, and commonly used devices before deploying the marketing messages.  
  4. Definition: You must clearly define your lists to optimize marketing messages correctly. You may build lists based on the marketing messages you want to create. For example, if you have an offer for people living in cold climates, then you would filter people based on where they live.  

Segmentation Examples that Help Increase Sales

This section will examine what you need to think about when marketing to a specific demographic or group of people. Following these generalizations helps navigate a marketing campaign, so it speaks to the members of the list you have created. 

  • Gender segmentation

Most gender-based marketing is self-explanatory. For example, if you are selling beard grooming products, then the target market is men. Likewise, females will be targeted for make-up products. However, it is not just about portraying the gender stereotypes to make the sale. Clarity and relevance to the target market should be the focus. 

You can also target the products mentioned above to the opposite gender if it is marketed as a gift. It is doable by creating separate lists and marketing using the appropriate messaging.  

  • Age segmentation

Age is another proper demographic for targeting customers. Let’s say that you’re selling vacation packages and using images. Peaceful images showing slow pace activities will be the best choice when marketing to over 50’s customers. 

Also, you need to consider their needs precisely and help them overcome hesitations. For instance, you may want to highlight that you don’t have to download an app to complete the booking process.

  • Income

Offers based on income can be split between value and quality seekers. Generally speaking, lower-income buyers will be more swayed by getting better value for their money. You’ll need to emphasize the price and discounts available.

Higher-income buyers with disposable money might be more likely to spend above market price to get better value. Therefore, your marketing should focus on the features and the advantages.  

  • Family status

Do your products sell better depending on the family status? For instance, companies selling school products would increase the ROI of marketing campaigns if they mainly target buyers with kids. Running a back-to-school campaign to young singles is wasted marketing dollars. 

  • Cultural background

Industries like food must consider the cultural background of buyers to determine what sells best. Whether it’s ready-made meals or ingredients, the consumption varies based on nationality and cultural background. Offering the right food to each list increases the likelihood of a sale.

How to Avoid the Pitfalls of Segmentation

Creating customer lists works great when executed correctly. However, it could be counterproductive with the wrong approach. You could end up losing sales and not making the most of your marketing efforts. Here are a few pitfalls to avoid:

  • Don’t alienate: The nature of generating lists and marketing to specific people can put off the groups that are ignored. In some cases, there is no way to overcome this issue. However, you can try to focus your marketing while offering something to your customer base. 
  • Stereotypes and assumptions: Don’t assume that specific segments of your customer base will prefer one offer over another. Carry out market research that can help you figure out the preferences and needs of a demographic.  
  • Accuracy: it’s essential to have up-to-date information on your customers. For example, the location and family status of a customer can change. This needs to be reflected on what marketing list they appear in. 

Final Thoughts

Segmenting a list based on demographics is a reliable and effective way to increase sales. It takes extra effort, and with multiple lists, complexity enters the picture. However, modern businesses have access to sophisticated CRM software that helps simplify the process. 

 

Creating effective lists based on your offer should be an ongoing process. It would help if you experimented with what works and does not improve the ROI of marketing spend continually. Start investing in segmentation in your business to boost sales to a whole new level. 

For more content to help your digital business grow sales, check out the other articles at Live Hive.