A solid segmentation strategy is key for differentiating your business from the competition. Why? Segmentation helps you better communicate the benefits of your products and services to prospects and ultimately provide better service once they become members.
At its core, segmentation is all about grouping your database records based on some characteristics like demographic information (e.g. age range) or behaviour (e.g. which products they use). Further, the ability to segment members comes down to how well do you know your members and how they behave.
Members can be segmented in almost an infinite number of ways. How to best segment your members is dependent on your business goals. However, there are four common segmentation approaches:
- Demographic: This is one of the most basic forms of segmentation. It involves grouping individuals according to demographic characteristics like gender, sex or marital status.
- Behavioural: behavioural segmentation groups people on the basis of their actions. For example, you might group individuals based on the products they have with your business.
- Psychographic: Using psychographic segmentation involves grouping the target market based on personality characteristics and/or lifestyle.
- Benefit: This form of segmentation involves grouping individuals on the basis of the benefits they are seeking in your product of service.
You can use one or more of these approaches to group your target market.
Unpuzzle marketing segments use a number of Member characteristics and behaviours to develop profiles.
Segments are Identified, Now What – This is important!
Once you have developed your segmentation strategy, you are not done. You must then begin to understand the needs of each group starting in four key areas:
- Product: Do your products and services meet the needs and desires of the segment?
- Place (Distribution): Are your products and services easily obtainable by the segment?
- Promotion: Do your marketing efforts use the messages and right forms of media to appropriately target the segment?
- Price: Does the segment perceive your products as being competitively priced?
It is important to fully leverage tools such as your banking system to capture the information that is necessary for member segmentation and targeting.
The more refined the segmentation, the better results you’ll achieve. Unpuzzle has developed 7 key segments to assist Credit Unions focus on the different groups within their membership. The business goals are essential part of the process, so the characteristics of your segments will be different depending on what those goals set out to achieve.
Take segmentation a step further and allow it drive your marketing activity. Need help? Contact us today to find out how your business can benefit from a co-operative approach to strategic marketing.