The importance of segmenting to drive profits and grow your business
Rachel Panther Business Coach at Harborough Innovation Centre shares the importance of segmenting to drive profits and grow your business.
Every business wants more customers. More customers equal more orders…it’s simple maths. However, increased workload can put strains on your workforce and require you to hire more staff to maintain a high level of service.
Let me tell you something…your business doesn’t need more customers. What you need is more high quality customers.
But how do you decide who these people are? By segmenting.
Market segmentation is about putting particular customers in different sections based on their similar needs and wants. It allows companies to create a strategy to target their products/services to customers that can potentially buy them.
Segmentation is important because not everyone wants the same thing. By speaking to everyone, you likely to be speaking to no one. By effectively segmenting your market, you have a clear idea on what customers to target that will generate you the most profits.
So think about it…what customers generate you the most money? It is important to for you to take the time to identify your key customers and segment those who would drive your business forward.
This can be based on:
- Overall turnover
- Average order value
- Their location
- Age & Gender
- The size of their business/ income indicators
- Industry sector/demographic
- How easy it is to serve and support them
By segmenting your customers, you provide more focus for your business and know what benefits to put across in your marketing. By talking to a specific target market, you can deliver customised and clever marketing messages that speak to your audience and generate a great return on your investment.
Whether you are B2B or B2C organisation, segmentation plays a vital role in helping you maintain your existing market share and help expand it. By looking closely to the specific needs of your customers, you are able to devise a strategy that gives you a competitive advantage, and generate happy and returning customers.