Discover some practical tips to segment your customers 

Targeting a market

Entrepreneurs usually begin their business journey by choosing a rough idea, that represents a thorough investigation of pressing challenges customers face. They search for business ideas that are severe, impact many customers and require quick fixing. Meanwhile, ideas sourcing differs depending on the idea itself and includes studying the entrepreneur’s background and the business environment. In studying the personal background, someone will evaluate his/her experience, qualification and interests to discover some good ideas, and checking the business environment includes the market, social and technological reforms. Entrepreneurs usually use the SWOT tool to study the entrepreneur’s background, and PESTLE tool to analyse the business environment. The PESTLE analysis involves studying the sectoral reforms of politics, business, social technology, legislation and environment. This business and personal analysis enable an entrepreneur to conclude idea opportunities and target-market options. Deciding on the target market involves considering multi-facets factors such as the market size, growth opportunity, barriers to new entrants and product substitution, competition structure and more. Attractive market, as defined by Porter’s Five Forces, is attributed by a reasonable level of protection against any new entrants and substituted products, low power of bargaining for the buyers and suppliers, and manageable competition. A market becomes fiercely competitive if traders are increasing, but the market size or demand is limited or contracting.  

Segmenting customers

After choosing the beachhead market, then you need to decide on the right customer segment, which is a group of customers, either individuals or businesses with common buying characteristics. Customer segmentation involves studying customers’ buying behaviours and dividing them into groups with similar characteristics, as based on segmentation bases. Such segmentation bases include motives, values, behaviours, attitude or priorities that customers sense toward a particular product. Customer segment should be measurable, accessible and viable. A measurable segment means that it is easy to understand and measure precisely who the customers are, while an accessible segment implies that it is easy to access and reach the identified group. A viable segment means that it is large enough to make it cost-effective and worthwhile targeting. To segment customers, you need to study their motives, values, attitude and behaviour toward your new product concept. The best model to illustrate the motives of people is the Maslow Pyramid, which explains the hierarchical structure of people driving needs, including from the bottom to top physiological, e.g. Food and water, safety and security, social belongingness, e.g. Love and friendships, recognition, e.g. Prestige, status and accomplishment, and self-actualization, e.g. Helping people. According to the Maslow’s model, customers consume products or services caused by one or more of these motivating drivers, and business must identify these motives that will help it identify the target customer segment and develop the right product and communication message. Studying the values of customers involves searching their preferences and senses of good or bad when acquiring a product or service, and the attitude shows the tendency of customers to respond positively or negatively towards a particular stimulus. While studying the behaviours of customers describes how customers behave when selecting a solution or a product to their needs. Buying processes go through the stages of problem recognition, information search, evaluation and deciding.

Attractive customer segment attributed for having sufficient funds, accessible, having a compelling reason to buy your product, large group and has potential to grow. Besides, you as the owner of the developed product must have the key capabilities and competitive advantages to develop such a product that best matches the customers’ needs.

Mapping target customers

This is the process of analysing customers based on multi-disciplined factors. The focus of customer mapping is to identify and prioritize their jobs, pains and desired gains toward a particular product. These findings are essential to innovate business concepts and understand customers. In mapping customers, you collect information on the target customers including who are they and how to reach them? What is their social and professional background? How many are they? What is their buying power? How do they prioritize their jobs, pains and desires? What are their motivation and demotivation players? What are their expected value propositions and desires? How do you classify them according to their level of risk-aversion and tolerance? Are they buyers, users, payers or influencers? And so on.

Profiling target customers

Customer profiling is identifying the target customers of a business, and it uses the outcomes of the customer segmentation to write customer profiling. It is listing the customers’ demography, education, professional background, needs, motives, values, attitude, behaviours, priorities, jobs, pains or desired gains. Customer profiling is a document that comprises information about the target customers, how to reach them and satisfy their needs.  

Describing customer persona

The customer persona is like the customer profile, but it includes more personal description, which explains the characteristics of one specific target customer. The customer persona guides the firm to understand, visualize and communicate the customer’s needs, and it is a useful tool to enable firms to meet these needs more effectively. A customer persona represents the specific characteristics of the target segment and includes amongst other details, the name, gender, age, education, profession, motives, requirements, values, attitudes, the behaviour of the individual. 

Final note


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Prepared by: Munther Al Dawood

Enterprise Expert

Grow Enterprise

Reading, UK

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