A customer segment is a group of potential buyers of your project’s products sharing similar characteristics, interests, value perceptions, behaviours, and incentives. Its importance derives from allowing you better understand the customers and their needs and create a tailored marketing strategy to meet their needs.
Step-By-Step Process
- Identify your target market in terms of, for instance, geographical location, product and industry.
- Set segmentation factors like demography (e.g., customer’s age and gender), geography (e.g., where customers reside?), psychographics (e.g., segmenting customers on their attitudes, value perception, interest, and motivations), and behavioural (e.g., their buying habits, usage patterns, and brand loyalty).
- Segregate the target market into groups of customers sharing similar attributes to the segmentation factors. The customer data, useful for segregation, can be collected through customer surveys, social media, observation, online and offline line communication, interviews, published studies, etc.
- Create criteria to decide on the best-fit customer segment for your project, including profitability (e.g., selected segment enables generating the highest revenues and lower costs), market size (e.g., segment belongs to bigger market size), customer needs (e.g., segment fits your product offers), competition (e.g., the segment is underserved by competitors), potential growth (e.g., it has potential to grow), financial capability (e.g., it can buy), and easy access (e.g., easy to reach them).
- Decide on the customer segment best fit your project, describe it, list the justification of selection, and estimate the size.
- Prepare the customer profile, showing details of customer demography, attitude toward the project’s product, value perception, behaviours (e.g., steps or processes to buy products), motivation, challenges (or pains), stories, interests, wants, desires (of values), expectations, objectives, along with the way to reach them and convince them to acquire your project’s product. Such customer data will help you identify customer patterns and insights that are useful in identifying and satisfying customer needs. By the end, you prepare the customer persona listing key attributes toward segregation factors of your favourite customer.
- Prepare the value proposition of your concept, listing the value (or gain) creators (e.g., benefit-making) and challenge (or pain) relievers (e.g., pains or hardships avoiders) around your project product.
- Ensure customer-value fit by matching customer profiles (e.g., customer value desires) with your project value propositions. Show real-life experience of how the customer segment accepts your product and its value propositions.
- Prepare a document highlighting the above outcomes, and share it with your team and experts.
Example
Customer segments for a pharmaceutical manufacturing company are end patients, characterized by being under chronic conditions (e.g., hypertension, diabetes, and asthma), adult age, generic medications for both genders whilst particular medicines for female patients only like osteoporosis and menopause), over the counter and hospital patient, concern about the medicine safety and quality, affordable prices, and residing in the GCC.
Useful Tips
- Use multi-segmentation criteria (e.g., demography, geography, psychographic, and behavioural) instead of one criterion.
- Visualize a specific customer persona (or customer journey) to your product and identify their attitudes, behaviours, and attributes.
- Be specific and describe the customers’ needs and how to fulfil them.
- Dive deep to observe and understand your customers’ needs and how to satisfy them.
- Regular update of customer data.
- Test and refine segmentation.
- Prioritize customer needs.
Things To Avoid
- Don’t be generic in describing the customer segment.
- Avoid stereotypes in making assumptions of, for instance, customer behaviours and attitudes.
Final Note
This article is sourced from my new book- Your Guide For Preparing An Industrial Feasibility Study. For more information about the book:
Visit the book site: https://growenterprise.co.uk/book-your-guide-for-preparing-an-industrial-feasibility-study/
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The author: Munther Al Dawood- Industrial Enterprise Expert
Grow Enterprise 