The benefits of needs based customer segmentation have become increasingly evident to marketers.
Unlike traditional demographics and psychographics which provide a broader descriptive overview of market segments, needs based customer segmentation provides highly relevant information about the motivations which underlie customers’ decisions.
By gaining an understanding of customers’ needs, businesses can predict how they will behave with greater accuracy. The purpose of all marketing promotions is to instil customers with confidence that your business can deliver above and beyond what your competitors can. Needs based customer segmentation provides the knowledge and tools to do this.
Why focus on Needs?
In addition to needs, markets can be segmented on the basis of values, attitudes and lifestyle. The reason needs based segmentation has proven to be so effective is because it gets right to the heart of what people want.
Identifying and targeting a segment which is not being served by the wider market is the key to differentiating your products or services. It’s far better to ‘own’ a couple of small segments than to dilute your message to appeal to a larger group and reach few because you’ve cast your net too wide.
Experts recommend identifying one or two primary segments, with a couple of close-in segments you’d like to attract when developing a marketing plan. This often requires businesses to make some tough decisions about which they areas or target groups they are going to take the focus away from.
The reality is that when resources are limited, it’s necessary for companies to underperform in some areas to excel in others and differentiate themselves from the competition. While it may be hard to let go of familiar approaches and try something different, the end results will be worth it.
By refining your appeal to target key customers and showing them how you can meet their unmet needs, you will get far more bang for your marketing dollar.
Identifying Customers’ Needs
There are many things you can do to find out about customers’ needs.
Research your satisfied customers. Delving into how you’ve met your satisfied customers’ needs will help you determine your company’s strengths and give you something to build on. Facebook, Twitter and other social media platforms have made it much easier and faster for businesses to conduct their own market research simply by engaging with customers who’ve followed them online.
Post surveys and run competitions. Through social media you can post surveys to your followers and encourage them to share the link with their network, or run competitions that require people to share their wants and needs.
Use data mining tools. Each social media platform has a range of tools for data mining which enable you to track conversations about products and services. You can analyse trends in your industry and tailor your content for different audiences.
The benefits of needs based customer segmentation are numerous. By identifying the unmet needs of key groups and showing them how you can meet these needs, you have a much greater chance of attracting and retaining quality customers.