How to Segment Your Internet Market
Web Marketing Today, April 11, 2000
Even a single small business can have several very different kinds of customers. It pays you big rewards to be aware of these differences and adjust your marketing strategies accordingly.
Segmenting Golf Shoppers
Let's say you own a golf store on the Internet. Great. You can assume that your customers play golf, but that probably isn't enough. Golfers have many differences, and their purchasing habits have a lot to do with these differences. I was intrigued recently by the questions asked by Wilson Sporting Goods in a marketing survey (no longer available) where you could receive free golf balls just for answering a few simple questions. (Full Disclosure: Wilson Sporting Goods is NOT a division of Wilson Internet Services -- no matter what anyone tells you! I wish!)
The Wilson Sporting Goods people asked:
- Age
- Gender
- Handicap level
- Whether you play on public or private golf courses
- Number of rounds of golf per year
- Manufacturer of your current irons
- Shaft type
- Current choice of golf balls
Of course, Wilson Sporting Goods is doing market research from a manufacturer's, not a retailer's, standpoint. But you could learn a lot from the results of this survey (which I'm not privy to). You'd probably find various groupings based on age and gender. Young golfers probably make different kinds of purchases, and for different reasons than older golfers. Female golfers have different needs than male golfers. The handicap level will tell you how good they are. Public or private courses (and perhaps brand of irons) tells you income level. Rounds per year tells you how serious they are about the game.
Let's say you were to do this kind of survey in your online golf store and found that these were your primary customer groups. (This is entirely fictional, intended as an example only):
|
Wealthy males, aged 60 to 75 who play an average of 70 times per year |
34% |
|
Moderate income males, aged 35-50, who play about 24 times per year |
27% |
|
Moderate income females, aged 60 to 75, who play an average of 45 times per year |
22% |
|
Other |
17% |
What does this tell you about what products you need to carry in your store? Where you need to advertise? How you need to divide up your store browsing sections?
Segmenting Newsletter Subscribers
I learned more about market segmentation when I discovered that there were several types of potential subscribers to my paid Web Commerce Today newsletter subscription. I found the following groups:
|
Newbies needing a quick e-commerce education |
48% |
|
Consultants and those with company e-commerce responsibility |
15% |
|
Current online storeowners and developers seeking to improve an existing store |
13% |
|
Those preparing an e-commerce business plan |
13% |
|
Other |
11% |
For about two years my marketing plan had been designed generically, to sell to anyone who might be interested in purchasing my newsletter subscription and obtaining access to my E-Commerce Research Room. When I began to market to each of these groups separately my subscription rate increased about 70%. (Take a look at http://www.wilsonweb.com/wct/ to see the different sales tracks for each segment.)
Segmenting Types of Site Visitors
From a web marketing standpoint, one of the difficulties you face when you offer a number of products aimed at different groups is to segment visitors quickly and move them to their own section. Imagine the problems with a company as diverse as Microsoft (http://microsoft.com), for example. Their website uses these kinds of categories:
|
Product Family Sites |
Customer Sites |
Notice the redundant way they segment by both product/service family as well as by customer type. I think Microsoft does a pretty good job at this.
When you go to IBM (http://www.ibm.com) you find this breakdown:
Resources for:
IBM Business Partners
Developers
Home/Home office
Investors
Job opportunities
Small business
You can see that IBM has four classes of customers: enterprise, developers, home/home office, and small business, and markets to each of them differently. Within each category will be the products particularly designed for that particular class of customers.
Product Segmentation
One of the best examples of product segmentation is Reebok shoes (http://www.reebok.com). When you go to their website they provide eight different categories: soccer, running, walking, football, basketball, children's, adventure, and fitness. Within each of these categories is a whole series of products tailored to customers with a particular sports focus.
Segmenting Your Customers
One of the most profitable exercises you can conduct is to segment your site visitors into specific categories. This takes market research on your customers and then careful analysis, but it will enable you to be much more successful in your website marketing efforts. Then include in your Internet Marketing Plan a paragraph or two explaining how you segment your potential customers. Later in the Plan you'll indicate which products or services are most suitable for each segment, and a marketing strategy to reach each segment of your market.
