Loading…
Segmentation: splitting your audience into useful groups
6 minutes · 9 steps · workout 4 of 5 in this module
What you'll be able to do
By the end of this workout, you'll be able to split your audience into segments using four basic criteria, calculate a segment's size and value, and decide which one to focus on.
A first look: What is segmentation?
Segmentation means splitting your audience into groups that share traits. The goal is to give each group the message and offer that fits it. There are four basic types: demographic (age, income, job), geographic (city, neighborhood), behavioral (what they do: purchases, carts, frequency), and psychographic (values, lifestyle). A persona describes one person. A segment is the crowd of people like them.
Example: Corner Coffee splits its members into two groups: people who come every morning and people who only come on weekends. It tells the first group about speed and the second about the relaxed vibe and pastries.
What this workout covers
- What is segmentation?
- The 4 tests of a good segment
- Case: Which segment gets the extra budget?
- Don't build segments on sensitive traits
- Case: The agency's tempting idea
A question from this workout: Which segment gets the extra budget?
Northpack has an extra $1,000 for ads next month. You split last month's orders into segments, and the top three are below. There are 9 models with a laptop compartment in stock, but only 2 travel bags.
- Students
- 810 orders · avg. order $20 · returns 18%
- Urban professionals
- 420 orders · avg. order $45 · returns 6% · repeat purchases 30%
- Travelers
- 180 orders · avg. order $65 · returns 5%
Where do you put the extra $1,000?
- Students. They place the most orders
- Urban professionals, with dedicated creatives that show the laptop compartment and rain resistance
- Travelers. Their average order is the highest
- Split it evenly across all three segments and show them the same generic ad
Pick your answer first, then open the reasoning below.
Show the answer and the reasoning
Answer: B. Urban professionals, with dedicated creatives that show the laptop compartment and rain resistance
Urban professionals bring in 35% of revenue, return little, and buy again, and there are 9 models in stock that fit them. The travel segment is valuable, but it's hard to grow with only 2 models. The most common mistake is picking students because of order count. Small orders and 18% returns eat up the profit.
The other steps work the same way: you decide first, then see why each option is right or wrong.
How you practice here
- 3 short concept cards
- 1 multiple-choice question
- 2 campaign cases with real-looking numbers
- 1 matching exercise
- 2 guided calculations
Part of the module: Target Audience and Value Proposition
No ad works until you know who you are selling to: personas, segmentation and a clear value proposition.
More workouts in this module
- Selling to "everyone" sells to no one
- Personas: picture one real person
- Listening to customers: reviews, surveys and search data
- Value proposition: why should they choose you?
Programs that include this workout