Segmenting your market

When marketing professionals use the word segment, they mean to break your total universe of potential customers into smaller pieces.

Doing so gives you a greater understanding of who would become a customer and why. The more specific your message, the more people feel like you’re speaking directly to them.

Direct, personalized communication requires a CRM that allows you to collect and use the data about your market segments.

Ultimately, you want to gain insight into understanding what motivates people to buy from you, so you can learn how to best serve the people who matter most to the growth of your organization.

Knowing the ‘why’ behind what people do gives you power. It gives you the power to analyze behavior, insight into influencing behavior, and ultimately, the ability to serve customers in the way they want to be served. Learning the ‘why’ behind what motivates your target market helps you serve them better, which is the key to growing your business and staying competitive in the long run.

Choosing the right segmentation categories

You can segment your market in several ways.

These all represent different data-driven aspects of people that set them apart.

Generally speaking there are several main categories:


Knowing where someone lives can tell you a lot about that person. The language spoken, the weather experienced, and the political views of people in that area paint a broad generalization of a person’s accessibility to and interest in your products and services.


Some of these characteristics, such as gender, birthplace, and height, are permanent. Some characteristics, such as interests, home owner status, number of children, industry, or job title, change often.


The company someone works for also determines what kind of products or services that person is interested in. If you sell a business-to-business product, this characteristic is especially important. Looking at the size of a company, the industry it’s in, and who its customers are helps you identify whether that company is a likely candidate for you to sell to.


When people partake in activities or find themselves in special situations, you have an opportunity to target them. Products or services related to holidays, travel, or specific situations where a product or service is needed fall into this category.


Segmenting your market by behavior requires more of a fluid way to measure what people are doing. Different people engage with you differently, so the better you understand what your leads and contacts are doing, the more you can read into what they want and why. Tracking when someone reads one of your advertisements, visits your website, downloads your e-book, or watches your video are all examples of how you can segment your market by measuring behavior.


Evaluating the personality traits of people can be challenging, but larger categories may be of use to you. Someone who is Type A versus being laidback may influence that person’s purchasing behavior. If you can target people based on who they are as individuals, you can speak to fundamental needs.


Looking at how someone would benefit from using your product or service may be another way to segment your market. If you have a product or service that can be used in a variety of ways, you may want to communicate how your product can be used to different people. For example, if you are Apple, you might communicate the iPhone’s camera features to people who travel a lot, but you might focus on business applications when marketing to professionals.


When you segment your market, look at all these categories.

The more you use your CRM to group your leads and contacts into precise segments, the easier you can target those people with personalized messages.

You shouldn’t rely purely on either demographic or activity-driven market segments. The measure of your target is a combination of both. Review performance of your marketing and sales for each of the segments you’re targeting, and see whether anything stands out as particularly high or low performing.

Using a group-centric methodology to separate your significant market segments is a powerful way of organizing your CRM. By using groups, you build natural market segments into the way you look at your contacts.