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Have you ever spent time, money, and resources on marketing, but failed to achieve the desired result? Your audience didn’t respond to the campaign, sales didn’t increase, and your business didn’t make a profit?
In many cases, the reason for this is the lack of segmentation. If your offers aren’t targeted at specific consumer groups, they can be confusing, uninteresting, and sometimes even annoying to your audience. Because of this, you can lose existing customers, conversion chances, and budgets.
If your product is not a basic need, such as water or air, it cannot be sold to everyone.
People can be grouped into conventional segments. Each segment has its own values, motivation to buy, choice factors, and needs. To hit the target and find an approach to the customer, there are several ways to divide consumers into groups. In this article, we’ll talk about the “5W”, a segmentation method using 5 basic questions about the customer and product.
- What is segmentation?
- How to implement segmentation?
- 5W in action: instructions for implementing segmentation using the Mark Sherrington method
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What is segmentation?
Segmentation is the division of a target audience into separate groups based on certain characteristics, such as demographics, behavior, needs, or preferences. Each of these groups has inherent common features that distinguish it from the others. The main purpose of segmentation is to adapt marketing messages, products or services to the specific needs of each segment, which allows you to achieve greater efficiency in customer interaction.
In other words, it’s like a marketer’s GPS. Without segmentation, your message will dissolve in a sea of other offers, never finding its way to the heart of your target audience.
By dividing your audience into groups, you ensure:
- Accuracy of marketing campaigns. Thanks to segmentation, you can create marketing campaigns that clearly reflect the needs of individual groups.
- Cost efficiency. Segmentation allows you to use your budget more efficiently, as you can identify the most profitable groups and direct more effort to them.
- Personalization. You will be able to address customers in a language that they understand and relate to, which brings them closer and inspires loyalty.
- Improving customer experience. When you understand your audience well, you can offer products and services that meet their expectations.
- Competitiveness. The more effective your campaigns are, the more powerful a competitor you will become in the market.
How to perform segmentation?
There are different approaches to segmentation, each of which has its own peculiarities and is applied depending on the goals of the marketing campaign.
You can segment your target audience by:
- Demographics, i.e., age, gender, income, education, marital status, etc. This is one of the most common and easiest ways to segment.
- Geography: country, region, city. This method allows you to obtain data on cultural characteristics, living conditions, and other factors that can influence consumer behavior.
- Psychography. This is the division of the audience by psychological characteristics, such as lifestyle, values, interests, and personality traits. With this method, you will create a more accurate portrait of the consumer.
- Behavior, i.e., the level of loyalty, frequency of purchases, and response to marketing campaigns. This way you can identify the most valuable customers and develop special offers for them.
In our work, we use the Mark Sherrington Method (“5W”), a unique method that helps to explore the deeper aspects of target audience behavior. The “5W” method can dramatically change your vision of customers.
“5W” in action: instructions for segmentation by the Mark Sherrington method
The name of this method encodes 5 questions:
1. Who?
Who is your target audience?
This question helps you determine the demographic, geographic, psychographic, and behavioral characteristics of your customers.
How to find the answer?
Use data from your CRM system, website analytics, social media, and surveys to segment your customers by the following criteria:
- Demographics: age, gender, geography. For example, pay attention to which regions have the most orders.
- Repeat purchases: who comes back again and again? This can help you identify your most loyal customers.
- Level of costs: who spends more? Segment your customers into those who buy products of high, medium, and low price segments.
Example
Nike segments its audience not only by age and gender, but also by the type of sport they play (running, basketball, fitness, etc.). This allows them to create special lines of shoes and clothing for each sport.
2. What?
What exactly do your customers need?
This question identifies your audience’s needs, problems and desires.
Find out:
- What exactly are your customers looking for?
- What problem are they trying to solve?
- What values are important to your customers?
- What product features or service capabilities are most important to your customers?
How to find the answer?
Conduct market research, analyze customer feedback, and observe their behavior on your website, app, or live. It’s also important to keep an eye on industry trends and competitors to understand what offers are generating the most interest. Also, determine which products or services are most in demand. Take a look at the sales reports in your CRM to see which product categories are most popular. Analyze customer support requests to find out which product features are most frequently asked or requested.
Example
Tesla understands that their customers are looking for not just transportation, but an environmentally friendly and innovative way to get around. The company focuses on meeting the needs of people who value technology, efficiency, and environmental friendliness. They promote their electric vehicles not only as a means of transportation, but also as part of a mission to reduce dependence on fossil fuels. This is in line with the aspirations of consumers who support environmental preservation.
3. Why?
Why do customers choose your product or service?
This question helps you understand your customers’ motivations. Perhaps your offer provides something more than rational benefits, such as emotions, additional values, etc.
How to find the answer?
Ask your customers for feedback to understand what motivates them to make a purchase. Analyze positive and negative feedback to see which aspects of your product have the greatest impact on customers’ decisions. To do this, use surveys or analyze reviews of your product to find out what customers value most about it (quality, price, service). Also research your competitors to understand what problems your product solves better than theirs.
Example
Coca-Cola positions itself as a brand that creates “moments of happiness”. Customers choose Coca-Cola not only because of the drink’s taste, but also because of its associations with the emotions of joy, friendship, and celebration. Knowing this, the company focuses on the emotions of customers in its advertising, making the product a symbol of good mood and pleasant moments.
4. When?
When do customers make a purchase decision?
With this question, you can determine at what point or in what situation your product becomes relevant to them so that you can choose the best time to interact.
How to find the answer?
Analyze data on previous purchases to understand when customers are most likely to place orders. Analyze the peaks of customer activity. For example, using Google Analytics, you can determine which days or hours your website has the most traffic. And to identify seasonal trends, use historical data from your CRM. Then you’ll understand demand cycles and be able to plan marketing campaigns accordingly.
Example
Starbucks uses seasonal promotions to popularize certain products at the appropriate time of the year. For example, in the fall, Starbucks introduces special pumpkin and cinnamon flavored drinks, while in the summer it focuses on cold drinks. These promotions are launched according to the season to meet the changing preferences of customers.
5. Where?
Where do customers make purchases?
It helps to determine the geography of the audience, as well as the sales and communication channels through which customers interact with your business.
How to find the answer?
Analyze the effectiveness of different marketing channels to understand where your customers interact with the brand and make purchases most often. These can be online stores, social media, email, phone calls, and physical points of sale. Analyze traffic to your website by geography and channel to find out where your visitors come from. Use social platform analytics tools (Facebook, Instagram) to identify the regions where your content is most often interacted with.
Example
McDonald’s is adapting its sales channels to customer habits by offering not only traditional restaurants, but also MacDrive and delivery through services like Glovo. Thanks to this, they reach a wide audience that can make purchases both in restaurants and via smartphone.
The “5W” method is an effective tool that helps to gain insight into the key motivations of audience behavior to the extent necessary to plan effective marketing campaigns.
The method has been tested in practice, and it helps us not only create ads that attract attention, but also convert that attention into sales.
Do you need help with audience research, strategy development, or lead generation? Contact the remote marketing department of Solve Marketing.
