How To Use Segmentation, Targeting And Positioning For Easy Growth
When it comes to figuring out how best to market your business there are a lot of different methods. SWOT analysis and TOWs matrices are popular choices, but one method that I have found to be extremely effective and considerably simpler in many regards is Segmentation, Targeting and Positioning, or STP.
One reason I love this approach is the focus on your client/customer rather than the products/services. When you use STP right, you start by knowing who you want to work with, and build the product or service they most need and want; something that perfectly aligns with both your goals and zone of genius, and their demand.
It’s also a great way of crafting an effective marketing communication plan, enabling you to easily prioritise your ideas and both existing and potential offerings. You can then deliver a marketing message that is tailored to your ideal clients in the most relevant and engaging way possible.
Focusing on your audience not only ensures your offerings have the most commercial appeal possible, but also that your marketing message is really focused, and more likely to achieve success.
Let’s dive in…
What Is Segmentation, Targeting And Positioning?
The STP process consists of three aspects:
- Segmentation – looking at your audience options
- Targeting – selecting your ideal clients
- Positioning – determining where your offering fits in the market, and where gaps in the market leave opportunities for new creations
One of the big questions people tend to ask when they’ve finished creating their ideal client profile it, “What do I do with it now?”
STP is one of several answers to that question and it’s a great way of ensuring your digital marketing efforts are as targeted and successful as possible. The focus of STP on commercial effectiveness is also an excellent way of ensuring maximum ROI from your marketing campaign, and avoiding the pitfalls of wasting precious resources marketing a product or service that nobody wants or needs.
Instead, by using STP you will focus your efforts on segments in your audience that offer the most potential, and then developing a bespoke ‘marketing mix’ (a strategy) for each of those segments.
How To Identify Segments In Your Audience
The first step in STP allows you to segment your audience and identify key niches as well as their specific needs. You already know your ideal client (if you don’t, download my free Ideal Client workbook now!), but there are niches within your niche, very specific areas you can focus on, and certain areas that will yield more new clients than others. Identifying these segments allows you to deliver a marketing message that is more focused, and as a result more effective.
Segmenting puts your efforts to identify your niche and ideal client on steroids.
As you identify the segments within your audience you will see that, even though they may all be in one niche, and even be a single ideal client, different segments have slightly different needs, wants, and levels. For example, you might have people who need a basic level of service and information (beginners), those who have more experience or more complex needs (intermediates), and those who are absolute pros and need extremely high-level information or services.
They’re the same ideal client, but at different stages in their journey, resulting in different requirements. Which means they will respond to different things.
Think of it as having a different playlist for each segment, a mix that plays the specific songs that segment will love and respond to most.
This is your marketing mix.
There are a few different ways of segmenting your audience…
One of the simplest ways of segmenting your audience is to do it by demographics. Are there natural splits in age brackets, gender, income levels, marital status, ethnicity and religious beliefs, location, or profession, which affect the type of product/service they need, the method of delivery, or the price?
For example, local clients who live or work in close proximity to you might prefer for you to deliver a course in person, in the form of a workshop or series of talks. People living further away don’t have that option, so an eCourse would be necessary (especially for international clients).
Another way to use demographics is to target age brackets. For example, older generations might have issues with technology and need simple and easily understood (or learned) solutions, while millennials might prefer high-tech, cutting edge options.
A word of caution when using demographics alone to identify your segments – be sure the criteria you use and solutions you identify genuinely match your audience and aren’t stereotypes. For example, making the branding for a female-only segment pink and very girly not only plays into the stereotype that all women like pink, but also presumes things relating to the gender and personalities of your audience that really can’t be determined by biological sex alone.
The way around the limitation of demographics is to use psychographics. These are the personality traits and emotional facets of your audience, determined through their behaviour (such as items purchased or viewed), attitudes, hobbies, lifestyle, preferences in books, magazines, films, music etc. and much more.
Think of demographics as the ‘who’ of your segments, while the psychographics deal with the ‘why’. They tell you why a person would prefer one thing over another, and why they are compelled to buy at all.
While demographics are usually fairly easy to ascertain, psychographics can be a little trickier. You should already have done the research necessary to discover all this info while pinning down your ideal client, but if you haven’t (or you don’t have enough information for this exercise) here are a few ideas for gathering more valuable insights:
- Interview them – speak to your target audience directly and get to know them on a one-to-one level.
- Surveys – use SurveyMonkey or a similar free site to collect data through a series of tailored questions.
- Customer data – check your existing customers and the information you have on them concerning buying habits, browsing history (you may not have this for your website but most email marketing providers track links clicked in email campaigns), feedback, reviews, and correspondence.
Another useful way to segment your audience is through their hobbies and the various activities they enjoy when they’re not working. This can include anything from diet and exercise preferences to their entertainment choices, where they go on holiday, as well as more literal hobbies like sports, musical instruments etc.
Depending on your audience this may be easily done, or prove quite tricky. For example, fans of well-established sports like football, who follow specific teams are very easily targeted. People who engage in a very widely enjoyed hobby, such as running, are also easily reached. But there are increasingly more obscure hobbies that aren’t easily targeted, either because they have a very small base, or there is a wide variety across how they are enjoyed.
For example, cooking is a common hobby, but there is a huge difference between a baker and someone who enjoys preparing traditional Indian or Chinese food. Same hobby, vastly different interests.
Belief and Values
If your audience is divided by religious or political beliefs, or value systems this can also be a good means of targeting them. Religion is a particularly good example of this, as certain religious beliefs can have a huge effect on a person’s day-to-day routine or behaviours. For example, the need to stick to kosher food or pray at specific times of day.
While this may not seem relevant to you initially if you dig a little deeper you might find it extremely helpful. For example, Mormons are documented to be a group who favour ‘multi-level marketing’. If you happen to have a group of mormons in your audience this is invaluable information to have.
More than that, making the extra effort to tailor your marketing mix to respect the beliefs and value systems of your audience will go a long way towards building the know, like and trust factor, and demonstrating that you genuinely care about them.
This might be as simple as knowing there are certain words, terms and topics that should be avoided in your copy, or it could be as complex as understanding that there’s a huge gap in the market for a new product line or service that specifically caters to religious, political or moral quirks.
The obvious examples are food lines specifically designed to be vegan, gluten-free, kosher etc.
An extension of age brackets, the stage of life your clients find themselves in can radically alter their needs, wants, and requirements, even if they’re buying exactly the same product or service.
Segments don’t only rely on information from potential clients but also existing clients. Really mine the behaviour of the people you’re already working with and see what it tells you. If you can, take a look at your competitors and the behaviour of different segments within their audiences. How do they segment? It’s not usually a good idea to directly transfer their segments to your audience, but it should give you some ideas.
What is the core benefit to your clients? You’d be surprised how often this varies across a single audience and even a single ideal client. For some people the benefit is that you’re saving them a massive amount of time, while for others it’s the reassurance that it’s being handled by someone who really knows what they’re doing.
The first is capable of doing what you do, but doesn’t have time. The second couldn’t do it with all the time in the world.
How To Target Your Marketing Mix
Your marketing needs to be specially targeted at each segment based on their individual quirks. The ‘marketing mix’ is a separate playlist for each segment to ensure everyone listens to the perfect tunes for their tastes.
There are a few ways of achieving this kind of targeted approach:
- Use language specifically relevant to the criteria that established the segment. For example, if age was the defining factor, ensure your marketing message uses the linguistic quirks of that age group.
- Focus on what’s different about each segment. For example, if you defined a segment based on the different benefits the people in it receive, make your marketing message all about the core benefit experienced by that segment.
- Paint a vivid picture of the specific situation this segment is experiencing. Get super specific and go into as much detail as possible. Really make them feel you’re talking directly to them, and that this is a solution designed with them in mind.
How To Position Your Products And Services
The final element of STP is positioning your products or services properly. You need to have two variables to work with in order to do this, but the variables you choose can be pretty much anything.
Let’s use chocolate as an example, because this is generally easier to understand with a product initially, and who doesn’t love chocolate?
In this example we’re using quality and price to ‘map’ the position of various types of chocolate. We place the ‘high’ values to the top and right, and the ‘low’ values to the bottom and left. Any type of chocolate can be placed in an area of the map by assessing its price and quality. Ferrero Rocher, for example, are of relatively high price, but aren’t exceptionally high quality chocolates, so they land in the bottom right. Lindt, on the other hand, are both high quality and expensive, so they are in the top right. By placing your products and services on a grid like this you can ascertain where they are positioned in the market. Once you know this, you know how to pitch them.
Is it a luxury service, or an economy? Exceptional quality, or bare basic? Beginners or advanced? Let’s take my services as another example.
I’m using two vectors here, ‘budget to luxury’ and ‘done for you to do it yourself’. It’s important to note that there isn’t a positive and negative side to your vectors, different people will value different things.
Not all my clients can afford to invest a large amount in their marketing, so they value the ability to take advantage of my expertise at a relatively low monthly price. For them, my Bronze Online Marketing Package is perfect. Other people prefer to hand over absolutely every element and never think about their digital marketing again. For them, the Platinum Online Marketing Package is ideal.
In addition to Done For You services, I also offer ways of learning to do digital marketing for yourself. Again, neither is positive or negative, they are simply different.
Finding Gaps In The Market
By mapping your products and services you can position them properly in context and identify gaps where there is a potential for you to create something new, and take advantage of a segment that isn’t currently being catered to. What’s even more helpful to do is map your competition’s offerings to see where the gaps in your offerings overlap with gaps in the market at large.
Let’s say I was looking at marketing a new eCourse that teaches web development. There are a few options here. I might do a course that teaches people to create a website using WordPress, or one that teaches them coding. I could also pitch it for beginner, or for advanced users who already had a reasonable understanding of the subject. In this example, Competitor 3 has covered all aspects of coding courses at an advanced level. This leaves three gaps:
- A basic course that covers WordPress and a little coding
- A basic course that covers coding and a little WordPress
- Or an advanced WordPress course
By combining this with the information I can see from the map of my existing offerings I can see that I already have an eCourse that caters to basic needs (albeit not a web development course). That excludes the first two gaps, so I want to offer an advanced course.
There is already an advanced course in coding on offer, so an advanced course on WordPress is the way to go.
Positioning like this can help you at every stage of marketing your business. From deciding what to offer to begin with, to creating it, marketing it, and continuing to improve it.
The key when it comes to STP is to select and design your segments and offerings to optimise growth. When you’re using the STP system it’s important to ensure your segments are large enough to yield a good return on the marketing investment you will make, and also sustainable. It’s also important to ensure you can contact potential customers in each segment and have ways of effectively targeting them.
For more on targeting segments check out my post on How To Use Your Ideal Client To Easily Improve Your Conversions…
Strategic Optimisation + Growth consultant for lean start-ups and change-making entrepreneurs enabling them to grow their business in a sustainable and profitable way. My super-powers are business optimisation, CX, SEO, and leveraging data insights for business growth. #fuelledbycoffee