Customer Journey

What Is Audience Segmentation, and How Does It Work?

Audience Segmentation

The way you reach your audience can be as important as the why behind your outreach — and sometimes more so. Regardless of whether your goal is to make sales, gain subscribers, or to spread information and ideas, the approach you take for different types of people must vary if it’s going to be effective.

That’s true even if your product, brand, or message is highly appealing. Sure, a 75-year-old man who lives in a small town may enjoy a type of food or appliance as much as a 33-year-old woman living in a city, but you can almost take it for granted that the same messaging won’t resonate with both.

What is audience segmentation, then, and how does it relate to this issue? The practice is, essentially, breaking a large audience into smaller, more specific and manageable groups based on shared characteristics, such as demographics and behavior.

At its core, audience segmentation lets you meet your potential conversions where they are. Once you know who you’re trying to reach, you can tailor your approach to suit people on a more individualized level. This enhances the precision of a marketing program, improving customer engagement while also preventing wasted effort and money. You can think of modern audience segmentation as the opposite of a roadside billboard or a plane flying an advertising banner above the beach: The latter examples target the entire potential audience as one, casting a wide net, but without much accuracy.

Why Is Audience Segmentation Important?

“Audience segmentation is like matchmaking for marketing — get it right, and you’re the hero who introduced peanut butter to jelly,” says Kris Flank, head of growth with LunarLinks. Get it wrong, though, and your messaging can be like oil to the proverbial water.

Audience segmentation is important because it allows businesses — or schools, nonprofits, artists and so on — to better understand their target market by focusing on smaller, more specific groups based on shared characteristics. This enables those doing the outreach to tailor and craft marketing messages and campaigns that will resonate more effectively with people in each segment, ultimately leading to higher conversion rates and improved customer engagement.

The process starts with research, planning, collecting, and analyzing a lot of data. Once you know more about the people you’re about to try and engage, you can tailor different messages about the same products, services, brands, and so forth in a more effective way, avoiding wasting time, effort, and cash. “Imagine sending the same email to a college student and a retired CEO,” says Flank. “One might click out of curiosity, the other might just unsubscribe.”

While the right messaging can lure in potential conversions, the wrong messaging can push potential customers away and maybe even turn them off your brand.

3 Types of Audience Segmentation

Demographics

“Demographic research means understanding the key variables of age, sex, income, location, and education that are important in crafting content and campaigns to meet the different needs of each group,” says Ashot Nanayan, CEO and chief marketing officer of Digital World Institute. “This is how brands avoid the one-size-fits-all approach and create highly relevant, targeted messages that really resonate with their audience.”

Demographics are often the first thing marketers consider when segmenting an audience, as they can vary widely, and because there is generally a lot of great demographic data already available.

Geographics

Geographic audience segmentation is essential to consider, and fortunately quite easy to implement. If you’re creating a marketing campaign for a fast food chain with locations in 10 states, for example, there’s really no reason to be worried about the residents of the other 40 states. If your marketing tools are currently only suited for suburban or rural use, but not for the city, don’t reach out to urban dwellers until you’ve nailed that part of the operation. And so on.

Behavioral

Behavioral segmentation divides an audience based on the behaviors of and actions taken by individuals, though this data is usually processed at a more macro scale. This can include studying past purchase history, product and service usage, brand loyalty, and more. If you identify a group that seems to use a product, platform, or service similar to the one you’re pushing, their behaviors indicate that they may be more interested in your messaging.

How to Segment Your Audience

To effectively segment your audience, you need to divide the greater target market into smaller groups based on shared characteristics like demographics (age, gender, location), behaviors (purchase history, website activity), interests, and psychographics (values and lifestyle, for example). These steps will allow you to deliver more tailored messaging and marketing campaigns that resonate better with each segment.

Some platforms make this quite easy to do, with posts targeted at specific metrics like age and gender (more on that in a moment). In general, you can get data on your preferred audience by purchasing data from analytics companies, by collecting info through CRM (customer relationship management) systems, with surveys, by backend web analytics, and more.

Using Audience Segmentation to Improve Targeting

“From a best-practice standpoint, with regard to targeting outreach, I always advocate for a holistic approach that not only leverages demographic insights but integrates psychographic data,” says Nanayan. “Factors such as interests, lifestyle choices, and values can greatly increase the accuracy of your targeting. For instance, through the creation of customer personas representing segments, businesses can plot content strategies and communication styles that best fit the persona’s preferences. This, in turn, leads to increased engagement and better brand loyalty.”

Nanayan adds that it’s important to continue with the A/B testing and data analysis, so that you’re constantly refining targeting strategies and ensuring that outreach is optimal.

Audience Segmentation Tips

When it comes to meeting your audience where they’re at, “Personalization is key,” says Flank. “Forget ‘Dear Valued Customer’ and speak directly to their needs. If you’re targeting sneakerheads, talk about the latest drop. If it’s busy parents, highlight the shoes that double as ‘park-proof and parent-teacher-conference approved.’”

Flank goes on to point out that marketers should experiment without fear. “A/B testing isn’t just for science class,” he says. “Try different headlines, images, and CTAs to see what clicks — literally. It’s like dating: Sometimes, the quirky opener works better than the formal introduction. Also, timing is everything. Sending an email at 3 a.m. because you’re a night owl? Think again! Catch your audience when they’re scrolling, sipping coffee, or procrastinating at work — it’s all about that perfect timing.”

Tools and Techniques for Audience Segmentation

“For targeted marketing, make outreach informed by data,” says Jose Singh, marketing manager with Academized. “Optimal practices include custom messaging, channel optimization, and A/B testing to keep it refined. Social media channels — Facebook, Instagram, LinkedIn — email campaigns and niche communities are the primary means of engagement. These are tools that enable you to fine-tune your targeted audience based on their behavior, interests, and past activities, making your communication more successful and effective.”

The raw tools include things like email blasts, texting, online ads, and targeted social posts and/or ads. These posts can be particularly powerful, because platforms such as Instagram, for example, allow for highly targeted content serving. You can, for instance, aim a post at just one gender, a specific age range, specific interests, and more. Also, you can use tools like Google Analytics to learn more about your potential audience before you even start the outreach.

The Future of Audience Segmentation

Not surprisingly, the future of audience segmentation is likely to be heavily influenced by artificial intelligence (AI), which will allow for more dynamic and more real-time segmentation based on the crunching of vast data sets. This additional insight should lead to highly personalized marketing initiatives adapted to individual consumers across various channels. The risk with AI, though, is the loss of that human element. Use the machines to gather your data, sure, but those email blasts, posts, and video scripts still require human creativity and empathy.

Key Takeaways

“First and foremost, audience segmentation starts with solid demographic research,” says Chris Sorensen, CEO of PhoneBurner. “One size does not fit all: Small businesses, for example, might need a more cost-effective solution, while larger enterprises could prioritize scalability and integrations. If we understand these differences, we can produce more direct messaging.”

“Personalization is also key when it comes to best practices for targeting outreach,” Sorensen adds. You have to make your audience feel seen and understood if your messaging is going to resonate.

Naturally, this process involves careful analysis of a lot of data, breaking down the larger marketplace using demographics, geography, behavior, lifestyle, and more. Once you’ve started a targeted marketing campaign based on audience segmentation, you need to stay dynamic and responsive — if your efforts aren’t getting the response you seek, change things up. If the response is superb, then keep on keeping on, learning all the while.

Frequently Asked Questions (FAQs)

What are some common mistakes to avoid when segmenting an audience?

Common mistakes to avoid include using old data, relying on segments that are too large, ignoring customer feedback, being rigid in segmentation, not having enough data, neglecting to personalize messaging, and forgetting to align your segmentation with specific goals. You should always be ready to try new things and change it up.

How can audience segmentation improve customer engagement and retention?

Audience segmentation improves customer engagement and retention by helping marketers to deliver highly targeted and personalized messages to specific customers, resulting in a more relevant experience that resonates more effectively, leading to increased interaction and loyalty towards the brand.

What role does AI and machine learning play in audience segmentation?

The true and total impact of artificial intelligence on audience segmentation remains to be seen, but there’s no doubt the data-processing capabilities of the latest AI systems will provide more and better data than ever for marketers, allowing you to create ever more precise outreach plans.

Can small businesses benefit from audience segmentation, and how?

Smaller businesses — or brands or individuals — can benefit from audience segmentation in all the same ways larger operations can, with one key difference: Budgeting. Whereas a huge conglomerate can generally spend more on marketing expenses, audience segmentation can help a smaller business avoid painful wasted funds by keeping the outreach focused and only as expansive (and expensive) as needed.

What’s the difference between audience segmentation and customer personas?

While both methods are used to understand a target market, audience segmentation involves dividing your audience into distinct groups based on shared characteristics, while customer personas are in-depth fictional representations of imagined individual customers within the targeted segments, created by marketers based on research. Personas provide a deeper understanding of a potential real person’s needs, motivations, and behaviors. Essentially, segmentation is the “grouping” and personas are the “characters” within the groups.

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