How does microsegmentation affect business growth?

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Micro-segmentation enables companies to achieve a deeper understanding of the customer. This, in turn, allows for even more effective marketing activities. In fact, each buyer is potentially a separate "market". With unique needs and requirements. In an ideal world, therefore, a separate strategy should be prepared for each of them. In real - buyers are divided into groups of customers, characterized by certain common elements.

Each customer is responsible for a large part of the company's operations, but it is not possible to tailor each product to a specific buyer. Market segmentation is the division of the market into homogeneous subsections of customers. Each market segment consists of a large, identifiable group. In general, the buyers' needs, their buying habits and attitudes, etc., determine whether they belong to one of them. It is assumed that consumers from a particular segment have similar expectations and needs. 

What is market microsegmentation?

I would not be surprised if the e-commerce application on my smartphone marked me as an active user of the application from the Lower Silesian Voivodeship, aged 35 to 50. I would be considered a paying customer who usually buys books, household appliances and CDs with contemporary Polish music. I am probably a customer who has a family with young children and usually makes a purchase when it receives a discount. 

Apart from me, there are probably many application users who fit the above description. However, we are still a small and very niche group of customers compared to the total user base of this e-commerce application. We all have similar behavior and characteristics. This is precisely the micro-segmentation of the market.

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Based on this definition of microsegmentation, an intelligent e-commerce application should send me, and customers with a profile similar to me, free shipping promotions or discounted sales. It should do this via push notifications, email, or social media. So that I and other customers in this group can continue to engage, buy and grow customer lifetime value from the beginning. And if the company does it right, we will be its customers for life. 

Micro-segmentation areas 

Currently, there is no one-size-fits-all way to segment the market. Marketing experts have to try out different variables, singly or in combination, in the hope of finding the best way to define their market structure. Here are some variables that microsegmentation is based on: 

1. Geographic Segmentation - Refers to segmentation based on a geographic area such as continents, nations, countries, provinces, etc. 

2. Demographic segmentation - breaks down the market based on age, gender, income, family status, race, etc. These are the most commonly used variables. 

3. Psychographic Segmentation - Divides buyers into different groups based on social class, lifestyle, and personal characteristics.  

4. Behavioral segmentation - consists in dividing the market into groups based on their knowledge, attitude, application or reaction to the product.  

Microsegmentation is based primarily on the diagnosis of customer needs. Further data analysis should focus on the aspirations (desires) of consumers about improvements that the company can offer them. There are other product-related factors to consider as well, such as frequency of use, type of use, brand loyalty and benefits sought. 

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Microsegmentation and macrosegmentation 

The types of segmentation can be divided into two types. The first is macro segmentation. Macrosegmentation means dividing the market into broad groups. For example, we can divide the world into broad destinations such as India, Australia, Europe, and America. Macrosegmentation is used to decide what our market will be like in relation to the global market. The macrosegmentation strategy is to offer the same type of product to the entire market. Today, this practice is used relatively rarely.

Companies that have always offered a single range of products for the entire market (e.g. Coca-Cola) now use market segments (Coca-Cola Light, Coca-Cola Zero, etc.) or adapt even more locally (Coca-Cola in Spain is not the same as in Warsaw - it is much sweeter than most beverages on that market). Micro-segmentation, on the other hand, is a process of fragmentation of traditional marketing segments, thanks to a critical assessment of customer needs in individual segments. It includes extensive marketing research, the subject of which is specific target group.  

How can market microsegmentation help? 

One of the best ways to accelerate your revenue growth is to focus your sales efforts on the right customers. For those with the greatest potential for business development. Market microsegmentation and customer segmentation are standard practices of experienced leaders. Their strategies are built to take advantage of the market segments where the company has the best chance of winning. All too often, however, segmentation stops at the level of defining segments as industries or markets, such as retail. However, this approach to segmentation is usually not detailed enough.

To really accelerate revenue growth, companies need micro-segmentation. Especially that in the era of the customer, one size fits only a few. Market microsegmentation is key to ensuring the right customer experience, but many professionals in the field of customer information acquisition (consumer insight) has not mastered its basics yet. Without this, in turn, it will not be possible marketing segmentation.

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Market microsegmentation as a strategy of the future?  

Demographic projections indicate that in the next five years, children and adolescents will become the main consumer class. With this in mind, companies can already think about micro-segmentation strategies in categories such as clothing, FMCG, entertainment and service industries. Brands that see changes in preferences take appropriate action. Yes, to ensure customer satisfaction, and thus build a strong, long-term position in the relationship with them. In conclusion, micro-segmentation of the market and customers seems to be inevitable. Although it may seem difficult. It will require appropriate strategies and actions to be taken public relations. The first plan will also appear diversified marketing. The million dollar question is - to what extent will it be possible to meet the enormous needs of customers in micro-segments in Poland?  

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