What is market segmentation?
Market segmentation divides a large audience into smaller groups based on demographics, interests, or buying habits. It helps you to create better products, target marketing effectively, and meet customer needs more efficiently.
Isn’t it better to see only what suits you instead of everything at once? That’s what market segmentation does! and to make it work, surveys help businesses understand what people actually want.
What are the different types of market segmentation?
- Demographic
- Geographic
- Psychographic
- Behavioral
- Firmographic
Demographic segmentation
This one is pretty straightforward. You segment people based on basic characteristics like age, gender, income, education level, and occupation. Think of it like looking at a person’s background to understand how they fit into certain groups.
Example: Imagine you’re a brand that sells high-end skincare products. You’d likely focus on women, aged 30–50, with a middle to high income because they are more likely to spend on premium products for their skin. You wouldn’t market the same way to teenagers, who may not have need for anti-aging skincare—or the income to afford it.
Why it’s useful: Demographic data helps you identify and target groups of people who are most likely to purchase your product or service based on their life stage or socio-economic status. You can make sure your marketing isn’t wasted on people who aren’t your ideal customers.
Geographic segmentation
This type focuses on where people live, whether that’s by country, region, city, or even neighborhood. Location has a huge impact on what people need and want because different areas have different climates, cultures, and purchasing habits.
Example: A company that sells snowboards would target people who live in colder climates, like the mountain regions of Colorado or Canada. Meanwhile, a brand that sells sunscreen or swimsuits would be focusing on sunny places like Florida, California, or even beach resorts worldwide.
Why it’s useful: Geographic segmentation allows you to tailor your marketing to people’s environments. If you know someone is in a cold area, they won’t be interested in your summer clothes, but they will be all over your winter jackets.
Psychographic segmentation
This is about understanding people’s lifestyles, values, and interests. Instead of just looking at who they are, you're looking at why they make the choices they do. What motivates them? What do they care about?
Example: A company selling organic food may target health-conscious individuals who value sustainability. These customers might be interested in reducing their environmental footprint, so the brand can market eco-friendly, organic products to appeal to that mindset.
Why it’s useful: Psychographics dig into how people think and what they believe in. It helps create a deeper connection with your audience because you’re speaking directly to their values, not just their external traits.
Behavioral segmentation
This focuses on how customers behave, how often they buy, what triggers a purchase, or how loyal they are to your brand. You can segment based on purchasing habits, usage rates, or brand loyalty.
Example: A streaming service like Netflix could segment users into different groups: frequent users who watch every day, occasional users who log in a couple of times a month, and lapsed users who haven’t logged in for a while. Based on this behavior, the company can offer loyalty perks to frequent users, discounts to occasional ones, and incentives to re-engage lapsed users and avoid losing subscribers.
Why it’s useful: Behavioral segmentation helps you understand how people engage with your product, so you can target them based on their actual usage. It helps you keep loyal customers happy and win back those who may have stopped engaging.
Firmographic segmentation (For B2B marketers)
When you're selling to other businesses, this segmentation type is all about looking at companies instead of individuals. It involves segmenting businesses by characteristics like industry, company size, revenue, or location.
Example: A software company might offer one version of their product to small businesses (with fewer employees) and a more robust, enterprise-level version to large companies. The needs of a 10-person startup are way different from a company with thousands of employees.
Why it’s useful: For B2B marketers, firmographics let you better understand the unique needs of each company type and tailor your offerings accordingly. This helps ensure you’re promoting the right product to the right business so you can maximize sales and customer satisfaction.
Why should you conduct a market segmentation survey?
Let’s be real; it’s hard to cater to everyone at once. People are different, and so are their needs. A market segmentation survey helps you break your audience into smaller groups so you can really understand who they are and what they want.
Niche markets can present better opportunities
Sometimes the biggest wins come from the smallest groups. By focusing on niche markets, you can discover untapped opportunities others have overlooked. Take, for example, a brand making shoes for people with specific foot problems. The audience might be smaller, but they’re often more loyal and willing to pay a premium for a product that solves their unique challenges.
You get to know your audience inside out
Think about it: How can you sell something if you don’t know who you’re selling to? A segmentation survey gives you clear insights into your audience’s preferences, habits, and challenges. It’s like having a direct conversation with them.
Retain customers more efficiently
Market segmentation surveys let you focus on what matters most to your customers, making them happy and ensuring they stick around for the long run. It helps businesses target the right people with the right products. When customers feel understood and their needs are met perfectly, they become repeat customers and brand advocates.
Segmentation makes your marketing more personal
Nobody likes a generic pitch. When you know what each group cares about, you can craft messages that feel personal like you’re speaking directly to them. That kind of connection builds trust and loyalty.
Save time and money
Why spend your marketing budget on people who aren’t interested? With a segmentation survey, you can focus on the groups that actually care about what you offer, making your campaigns more effective and cost-efficient.
Market Segmentation: A step-by-step guide
- Step 1
Understand your audience
Pre-event surveys help you uncover attendee preferences, such as themes, schedules, and activities. These insights ensure your event is tailored to their interests.
- Step 2
Decide how to segment
Now, think about how you want to group your audience. You can segment them by demographics (age, gender, income), geography (where they live), behavior (buying habits, brand loyalty), or psychographics (interests, values, lifestyle). Choose what makes the most sense for your business.
- Step 3
Gather data with surveys
You need real data to back up your segmentation. The best way? Surveys! Ask people about their preferences, needs, and habits. Understand your customers better with this free, ready-to-use market segmentation survey template.
- Step 4
Identify key customer groups
Once you have the data, look for patterns. Do certain groups share similar preferences or behaviors? Organize them into meaningful segments these are the different types of customers you should focus on.
- Step 5
Choose the best segments to target
Not all segments are worth your time. Focus on the ones that are big enough, profitable, and easy to reach. The goal is to pick the groups that will bring you the most value.
- Step 6
Create personalized strategies
Now, tailor your marketing to each group. Customize your ads, messages, promotions, and even products to match what they want. The more personal, the better!
- Step 7
Launch, monitor, and improve
Roll out your campaigns and track the results. Are people responding well? Are they buying more? Use surveys and analytics to measure success and tweak your approach as needed.
That’s it! Market segmentation helps you speak directly to the right people, making your marketing more effective and your business more successful.
Best practices for market segmentation
Understand customer needs
Study what your customers truly want, not just what you think they need. Use surveys, feedback, and purchase history to get real insights.
Identify customer segments
Look at buying patterns, preferences, and pain points. Group customers in a way that makes it easier to market to them effectively.
Expand into new segments
As your business grows, look for new potential customer groups. Adapt your strategy to explore untapped markets.
Creating clear buyer personas
Personalized experiences create lasting impressions. Learn what guests truly value and tailor your offerings accordingly.
Tracking and measuring performance
People want the best experience for their budget. Surveys help assess if your pricing matches the perceived value of your services.
How Zoho Survey can help you?
Zoho Survey's features help you manage the segmentation process to produce effective results without consuming excessive amounts of time and resources. With varied question types, customizable themes, and logic-based rules, you can craft surveys that lead to honest and accurate responses, which helps you make the right decisions for your business.
Zoho Survey offers a variety of templates to make your research easier.
Research panels
Sometimes, you need more answers than your contacts can give you. To reach more respondents, you should consider using a research panel. These are groups of verified people with varied cultural, demographic, and geographic backgrounds who would be willing to be part of your research. Zoho Survey's Buy Responses feature helps you pick a panel based on demographic, economic, and geographic attributes to quickly collect responses for your research.
Try Zoho Survey's Research panel to help you reach your target audience.