How to Maximize ROI with Market Segmentation

Ogno How to Maximize ROI with Market Segmentation

If you try to please everyone, you’ll end up pleasing no one. In today’s digital landscape, you need to go beyond the one-size-fits-all marketing campaign. You need to focus on highly targeted, personalized marketing to deliver more value to your customers. This will also result in higher quality leads for your sales team, and therefore, better marketing ROI. In the following post, we will detail how market segmentation can help you maximize this ROI for your business.

What Is Market Segmentation?

Market segmentation is the process of dividing your target market into smaller groups based on shared characteristics. By dividing your target market it becomes easier to tailor your message and create personalized, value-packed experiences for your potential customers.

Meeting the needs of your target market segments through personalization can be a crucial driver of growth and efficiency. According to a study by Epsilon, 80% of people are more likely to do business with a company that uses personalization tactics. Additionally, increased personalization can reduce customer acquisition costs by 50%. It also increases revenue by up to 15%, and improves marketing ROI by 30%. Market segmentation helps you to create these personalized experiences.

There are four main types of market segmentation:

Demographic Segmentation

Demographic segmentation is the creation of segments based on demographic data, like age, gender, occupation, salary, etc.

Psychographic Segmentation

Psychographic segmentation goes beyond primary demographic data, dividing your audience based on their attitudes, lifestyle, values, and interests.

Behavioral Segmentation

Behavior segmentation is based on what your audience does rather than who they are. Using purchase history, website visits, social media engagement, and other measurable interactions, you can segment based on behaviors.

Geographic Segmentation

Geographic segmentation looks at location to make your messaging and content more relevant. It’s also meant to help you avoid advertising to people who are not in your region.

What Are the Benefits of Market Segmentation?

If you’re wondering if segmentation is worth the effort, the answer is loud yes. Market segmentation empowers your marketing and sales initiatives. Its benefits can be further summarized by the following categories.

Aligned Marketing Messages

With so much competition for attention, messaging needs to cut through the noise. Market segmentation helps you create content that’s aligned with each segment’s needs and interests.

Personalized Ads

Google, Facebook, and other advertising platforms have precise targeting capabilities. They enable you to reach the people most likely to engage with your business. However, to leverage these powerful targeting capabilities you must know your audience. Market segmentation helps you do just that. By doing this you will improve campaign effectiveness with meaningful ads and relevant content.

Quality Leads

You can better identify which leads result in sales and focus your marketing efforts on those segments. If your messaging is too broad, sales teams will waste time on low-quality leads. Creating targeted content helps attract the people who are most likely to convert to customers.

Stronger Relationships

Market segmentation allows you to address your audience’s pain points, highlighting that your business understands their needs. The more you align your content with your audience’s needs, the stronger the bond will become. When you can provide relevant, valuable experiences at every touchpoint, you increase the chances of conversion and brand advocacy post-purchase.

How to Approach the Segmentation Process?

The segmentation process can be broken out into four steps.

Step 1: Analyze Your Current Customers

Market Segmentation
Unsplash: @Scott Graham

As a first step, take a deep dive into your existing customers. Analyzing your past sales and conducting internal market research can reveal patterns and insights to help identify audience segments.

There are many different ways to conduct this research. For example, you can mail questionnaires to existing customers, call your contacts at your best accounts, or send surveys to gather the data you need.

Your research should answer the following questions:

  • What are our clients’ hobbies and interests?
  • Are they willing to recommend your business? If not, why not?
  • What are their pain points?
  • What would they like to achieve with product/service?
  • Do they feel the current product/service is lacking something?

It’s important to gather feedback from happy customers, but also from those dissatisfied with your performance. This will provide a range of data to help you identify the customers who are the best fit for your company and insights on how you can improve the customer experience.

For behavioral segmentation, you can use analytics tools to see how different segments engage with your website.

Step 2: Identify Your Ideal Customer

Knowing what your ideal customer looks like makes it easier to focus your marketing and sales efforts on the right audience segments.

Using the data collected in the first step, create an outline of your ideal customer. The outline should cover everything from primary demographic data and pain points to social media engagement and behavior.

The more detailed your ideal customer profile, the more effectively you can create hyper-relevant sales and marketing initiatives.

Step 3: Find Target Segments

Market Segmentation
Unsplash @Silvan Arnet

The next step is to use the ideal customer profile to find target segments. You can use demographic, geographic, behavioral, or psychographic data to find patterns in your customer base for segmentation. You may find that geographic or demographic data shows that your customers share several characteristics that you can use to inform marketing and sales, for instance.

For psychographic segmentation, you will need more in-depth data collected from customer surveys. This type of segmentation can take more time, but it can also provide the most valuable target segments.

Step 4: Test, Measure and Tweak

Now that you know who you are targeting and what they find engaging, you can develop a campaign concept and start testing. It’s essential to start small and use concept testing to trial your ideas before scaling campaigns.

As a result, you gain valuable feedback without dedicating too many resources. After testing your campaign, analyze the results to see what worked and what needs improving. Keep in mind that the ability to be data-driven is one of the top advantages of digital advertising. It is vital to increasing your campaign’s effectiveness and success.


In conclusion, today’s consumers expect personalized experiences and market segmentation helps deliver on those expectations. Similarly, it can help you increase marketing ROI, attract quality leads, and position your brand as one that values its customers.

Remember, market segmentation isn’t a one and done strategy. As a result, you need to adapt and be flexible throughout the process. This outline should help you navigate the shifting needs of your customers and maintain your competitive advantage.

If you want to see how market segmentation can help your business get more qualified leads and more sales, schedule a free consultation. Our team of marketing fanatics here at Ogno is ready to assist you.

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