As marketers, we’re constantly trying to answer one foundational question for every campaign: what do our customers want?
Of course, not every customer wants the same thing. That’s why many companies split their target audiences and prioritize customer segments based on how value is derived from their products and services.
This is known as benefit segmentation, a marketing methodology used to break up your target groups based on the perceived value they will get from your particular product or service. We’re here to help explain what benefit segmentation is, how to use it alongside other market segmentation methods, and offer examples of real companies already doing it.
Why Is Benefit Segmentation Important?
Companies use benefit segmentation as a way to find out which members of their target audiences will benefit most from using the companies’ products or services. The idea is to identify target audience members who are the most likely to convert because they have a need for your product or service.
One positive by-product of benefit segmentation is that it can help reduce customer churn. If you know how a potential customer benefits from your product or service, you can deliver the exact value they’re looking for. Then, if your product or service is continually meeting the specific needs of different customer groups through your marketing strategy, those customers are more likely to continue purchasing from your company over time.
One positive by-product of benefit segmentation is that it can help reduce customer churn. If you know how a potential customer benefits from your product or service, you can deliver the exact value they’re looking for.
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You can also use benefit segmentation to create stronger acquisition campaigns that are targeted toward specific groups of customers based on the benefits they can receive from your product.
Product development can be enhanced through benefit segmentation as well. This can be done by looking at other segments within your target audience that are being underserved by your current product or service offerings, and see if there’s an opportunity to create a solution that may offer greater benefit.
How to Use Benefit Segmentation with Other Approaches
To get a holistic understanding of your target audience, you should also be tracking a combination of segmentation data. Other market segmentation methods can work alongside benefit segmentation.
Behavioral segmentation, for example, is all about customer actions — such as their purchasing habits and brand interactions. Companies can use this segmentation data to tailor their marketing efforts and create a more customized customer experience.
To illustrate how this method works with benefit segmentation, consider the example of an outdoor retailer. Let’s say that the company knows that a customer segment tends to make high-tier purchases (behavior) because they need expensive equipment to go skiing every weekend. Based on this information, the retailer creates a marketing campaign featuring high-ticket skiing products targeted at this group, with a picture of skiers hitting the slopes (the product’s benefit for these customers).
To get a comprehensive understanding of customers, you need to look deeper than the benefits you can offer them. Each type of segmentation method provides unique insights about your customer. Using a combination of segmentation methods can help empower you to deliver relevant campaigns that resonate with customers.
By limiting your segmentation data, you’re also limiting your knowledge of the customer. Instead of isolating each piece of data you collect from your different segments — think about creating a more comprehensive segmentation strategy that includes all your segments. Look for segmentation variables and patterns, and identify areas that can help give you a better translation of what your customers are really trying to say through the data.
How World-Class Companies Use Benefit Segmentation
To gain inspiration for your own benefit segmentation, consider these powerful campaign examples from real companies. These brands successfully implemented a key benefit for a specific customer segment into their ads and pinpointed one particular aspect of their product or service that may resonate best with potential customers.
Crest markets different types of toothpastes based on the results they deliver. For example, they have toothpaste designed specifically for teeth whitening and another that is designed for sensitive teeth. In the example below, you can see their advertising efforts are tailored to customers looking to whiten their teeth.
A potential customer looking at this ad will not only read the benefit (white teeth) written out in plain sight, but they can also see that idea through the included image. Even a small detail, such as the glint on the “whiter teeth” text, evokes thoughts of pristine cleanliness that draws potential customers in.
Crest targets a different benefit segment with their sensitivity toothpaste.
Source: Dental Care
This ad takes a more scientific approach with images of gums and teeth and the badge that proclaims “ADA accepted.” The focus is more on the toothpaste’s medical benefit of stronger gums versus how your teeth will look. A potential customer with sensitive teeth looking at this ad will see the ADA badge and be at peace knowing that there is official approval from the largest dental association in the United States backing this product.
For their Ram truck line, Dodge targets people who work in trades or enjoy heavy-duty vehicles. The trucks are almost always marketed as rugged, durable, and tough in ads — as the example below highlights.
The image above is in contrast to another Dodge ad, which is focused on highlighting the quality of its vehicle for customers who are looking for a vehicle that is reliable and dependable for everyday use. Simply showing this blue vehicle alongside an award badge from J.D. Power is meant to give Dodge more validity as a brand. By aligning themselves with a company that is known for tracking automotive customer reviews and intelligence in the United States, Dodge is trying to prove the quality of their vehicles.
Source: Facebook Ad Library
To keep their marketing efforts relevant, Spotify has crafted their ads based on how users get the most value out of their app. The example below shows how they’ve targeted customers that like to listen to music in their cars. The placement of this ad on a large billboard is meant to strike a chord with the thousands of drivers that will see as they pass by.
Source: MarComm News
In the ad below, Spotify has targeted another benefit segment in couples.
Source: How-To Geek
Their Spotify Premium Duo initiative is specifically designed to attract couples who live in the same household and want to use one Spotify account. They can still listen to different music and have separate playlists, but it comes at a significantly lower cost than two separate Spotify Premium accounts.
Use Benefit Segmentation to Find Out What Your Customer Wants
Ready to use benefit segmentation? Creating strong buyer personas is a good place to start. Use this template as a guide to build your profiles and get a better understanding of how different personas get value out of your brand.
You can also learn more about your potential customers using Alexa to pull crucial audience insights with our Target Audience Analysis feature.
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