Make your marketing efforts much more effective by dividing your target market into subgroups through market segmentation. Depending on the product or service your business provides there are many categories into which you can segment a market, including geographic variables, demographic variables such as age and gender, psychographic variables such as lifestyles, as well as behavioral variables such as brand loyalties.

Once you determine a customer segment that you want to target, you have the opportunity to greatly increase your marketing effectiveness. When researching customer segments use the information you find to:

1. Identify unmet customer needs through market segmentation.

2. Market your business most effectively by tailoring marketing strategies to different segmented markets.

3. Establish appropriate service options and product features for different market segments.

Action Steps
The best contacts and resources to help you get it done

Use customer segment provider software solutions to segment your target markets

Market segment software will take information that your business already has, such as mailing lists and customer surveys and translate that information into customer segment information. The software will track sales, customer satisfaction and other data such as the geographic distribution of your customers.

I recommend: Get a preview of and buy the Market Segment Master software application from the Marketing Process Company. Download CMS Decision Tree and Segmentation from Rosella Software. Or, try PolyAnalyst, the customer data mining software application from Megaputer.

Get customer segmenting training for you and your employees

Educate yourself and your team on the basics of segmenting a market. Learning the best market segmentation techniques is especially useful for small business that lack formal marketing departments.

I recommend: Learn how to segment markets from the professionals with a free trial at MarketingProfs. Sierra Information Services provides both public and on-site training sessions and seminars to equip your team with the skills to understand the data collected by marketing software solutions. AcornSystems provides intensive training courses on all of its customer segmentation software applications.

Hire a marketing firm to handle your customer segmentation for you

If handling your company's market segmentation seems out of your league, fear not. There are a wealth of marketing and consulting firms that specialize in market segmentation, with some specializing in segmentation for particular industries. While hiring an outside firm may require a bigger initial investment than the do-it-yourself approach, the increased income you may receive from a properly segmented customer base will be well worth the money.

I recommend: Contact Quatro Consulting to handle all of your customer segmentation needs. Or, hire Bain and Company which has over three decades of experience.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Practice simple market segmentation by using different marketing tactics to reach different groups on your customer segment list. For example, email young customers while using traditional mail to reach older customers.