In the previous post, I made the point that we need to be able to offer services adapted to our clients’ needs. You agreed with me on Twitter and in conversations that we had. I also mentioned that the article was the first point in understanding customer segmentation, our theme this month.
Here’s a very serious definition of segmentation for you: “The process of grouping customers in markets with some heterogeneity into smaller, more similar or homogeneous segments” Dibb et al. (2006). In other words, market segmentation is all about being able to put your customers in groups according to their shared values, features and needs.
Take a look at this video:
And this one is pretty useful, too:
This image is also a very simple explanation why we need to segment our customers:
But how all this can help us in selling translation and marketing our services?
We all have limited resources and budgets for marketing. With customer segmentation, you can make sure that the money and time you invest is well spent and reaches the right people. Knowing the distinct segments that your potential customers belong to helps you create a more targeted message corresponding with their needs and values.
We often struggle with increasing our rates. Many of our colleagues fear that a flat increase may leave them out of work for some time, before they find better paying clients. Customer segmentation helps you separate clients with higher price inelasticity (meaning likely to pay more if you ask for more) from clients who won’t accept your increase.
Segmenting customers is very helpful when comes to prospecting and growing your customer base. It’s so much easier to concentrate on developing just one, well-defined segment, rather than just trying to “find more clients”. Clearly defined groups will also help you identify who’s also competing for their attention.
By segmenting your clients and discovering their needs you’re much more likely to develop a brand that resonates with them.
What do you think about customer segmentation? Next week I’ll share how to segment your customers and introduce a segmentation strategy.