Skip to content
logo
Image showing groupings of multi-colored dots, connected by a web of grey lines. Market segmentation and personas definition and differences blog post.

Ultimate Guide to Market Segmentation & Personas


Ian Williams

Sep 28, 2023

In the customer experience world, there is increasing dialogue about the importance of market segmentation and customer personas. You may be forgiven for thinking that they are exactly the same thing, and while they are related marketing segments and customer personas are two distinct things. 

Irrespective of how well a company is able to identify and profile its audience, the question remains as to the extent to which businesses can personalize the experience to meet individual customer needs, while still profiting from the relationship.

After all, the whole purpose of establishing a target market and creating audience segments is to strike the right balance between meeting customer needs while maintaining sufficient volume to achieve an maintain critical mass in a competitive market.

When we think about marketing personas vs segments we need to understand what makes them distinct and how they work together.

Contents

Tip: Learn more about customer segmentation and customer segmentation tools.

What is Target Marketing?

Target marketing refers to the process of defining specific segments of your audience through various identifiers. Businesses with multiple brands or products will have multiple target markets.

When you approach marketing this way you can apply a different marketing mix (product, place, price, promotion) per target market, helping you reach those potential customers who actually have interest in the product. 

These efforts help increase brand awareness and contribute to brand loyalty over time.

Segments vs Personas: What's the Difference?

The primary difference between these two marketing strategies is granularity. Segments could be considered a broader umbrella, while several personas might exist within a segment.

Types of segments you can break your audience down by include: demographic, geographic, behavioral, and psychographic. You can use these to better manager your marketing channels to ensure you're reaching the most relevant new and returning customers.

Personas take a deeper look at specific customer archetypes who occupy these segments. These are helpful for crafting marketing language, content marketing strategy, and mapping your customer journey.

Market Segmentation

The principle of segmenting your consumer base into smaller, more manageable chunks that share similarities is standard practice for most marketing teams today. That being said, organizations don’t always get it right. For most companies, one of the biggest obstacle is knowing where to start.

There are four primary types of market segmentation. You should start here before diving into customer personas, to give you a baseline from which to outline your marketing strategy and KPIs:

Benefits of market segmentation

There are many benefits to using marketing segments in your strategy. They are incredibly useful when crafting your marketing comms and providing consumer insights that help your team to focus their campaign efforts. For example, once you have segmented your audience, you could:

  • Create targeted, and therefore more impactful, messaging
  • Establish a deeper emotional connection with your audience
  • Choose your communication channels more strategically
  • Differentiate your brand from competitors
  • Align closer to your consumers' values

As you learn about your audience on these levels, you can continue to hone your marketing efforts and build brand trust.

Tip: Use consumer insights and consumer intelligence to help you better understand who your audience is, and where the marketing opportunities are.

Types of market segmentation

As we mentioned above, the four main types of marketing segmentation include:

  • Geographic
  • Demographic
  • Psychographic
  • Behavioral

Using them in tandem will help inform a more well-rounded picture of your audience. People are complex and in today's world a simplistic view that relies on outdated assumptions simply isn't going to cut it.

Geographic segmentation

One of the most straightforward ways to define your target market is through geography. There are a few ways this is useful:

  1. Brick and mortar proximity: Based on knowing a zip code and, say, its proximity to a particular store location that’s having a sale, you can use direct marketing to target that region specifically — perhaps sending a direct mailer with coupons for an extra percentage off.
  2. Urban vs rural: Cater your messaging based on whether your target market lives in an urban or rural setting. Tapping into the differing needs and values of these communities can help your brand stand out.
  3. Climate: Talking about the weather may be the stereotypical small talk approach but it is a great equalizer. Consider how the climate affects your audience in particular geographic areas and use that to inform your marketing strategy. For example, a clothing company can focus their shorts, t-shirts, and swimwear to people in warmer climates while jackets, long pants, and snow gear are marketed to consumers in cooler climates. 

Demographic segmentation

Another tried and true marketing technique uses demographic data for appealing to particular groups. B2C companies might use age, race, education level, and income whereas B2B companies could utilize knowledge of company size and industry. 

Be aware though: using socio-economic demographic information alone is a fairly approach and marketers should not depend solely on this type of data to inform their marketing strategy. 

Psychographic segmentation

Getting a bit deeper into the weeds, market segmentation based on a person's interests is an increasingly popular approach.

Psychographics take into account your audience's likes and dislikes, values, motivations, priorities, conscious and subconscious beliefs.

This approach, while alluring, is inherently flawed and can be inaccurate from a behavioral perspective; there is often a significant difference between what customers say their preference is and what they do in reality.

One specific example of this was a survey taken of London city commuters, asking them what newspaper they read.

The survey indicated that a very high proportion of people claimed to read a broadsheet newspaper on their way into work. However, these figures did not tally with the newspaper sales data showing that in reality, a significantly higher proportion of red-top tabloids had been purchased.

Behavioral segmentation

Closely related to psychographic data, behavioral segmentation takes into account purchase patterns and brand interactions.

Behavioral market segmentation takes a quantitative look at the hard numbers that either prove or disprove psychographic assumptions (i.e. the fact that although London commuters said they purchased legit newspapers, they actually bought tabloids).

While psychographics can be tough to sort out, it’s important not to discount them altogether. Behavioral data provides a very accurate representation of reality, it does not consider the aspirations and desires provided by psychographics.

After all, perception is reality in the mind of the customer, so something can be missed if we only consider people in the way that they ‘are’ rather than the way in which they would like to be seen. Especially for marketers! 

A word of caution

The world is becoming increasingly complex so even these parameters for the segmentation of your target market are less cut and dry than they used to be. There are dangers that come from categorizing people on the basis of their location or academic attainment, and we are acutely more aware of them today than we were even 10 years ago.

A combination of these data sets is most likely to give the most accurate picture of your audience's character, thereby theoretically aiding the segmentation process. However, in today’s big data world, questions are being raised, not only about the management of data but also the relevance and future direction of segmentation.

The Next Step: Audience Personas

Some argue that segments and personas are completely different, whereas others suggest that a persona is an evolution of a segment. 

Having worked with both, my recommendation would be that an organization needs to get its target markets right at the outset before building personas around them. It certainly doesn’t make any sense to create characteristics for potential customers that bear no relation to a meaningful and accurate segmentation exercise.

Market segmentation validates the identity of homogeneous target groups, whereas personas help to then enrich those identities for other purposes.

Read more about creating a customer profile

What is a Marketing Persona?

Personas enable a business to craft a detailed story around the actions and motivations of your audience through combining the extensive quantitative data used for market segmentation and the rich qualitative data that can be gathered from other sources, such as interviews and focus groups with individuals recruited from representative segment samples.

Personas ‘lift’ segments by providing a much richer qualitative picture of a typical ‘fictional’ customer within that segment, animating their personality and values. 

The information not only relates to the needs and wants of the customer relative to the product, service, or channel; it also helps build an understanding of their backstory. The goal here is to view your customers as full-fledged, 3 dimensional people, rather than simply an email address or purchaser.

To demonstrate just one of the many ways this can be useful, take a look at the differences between people who follow Disney Plus vs those who follow Prime Video.

Disney+ audience:

Segment distribution of the Disney Plus audience, created using Meltwater.
Disney Plus audience segment example using Meltwater

Prime Video audience:

Bubble graph of Prime Video segment distribution, created using Meltwater
Audience breakdown using Meltwater, followers of Prime Video

While the age range is the same (18-24) that's where most of the similarities end.

From this data, we can surmise that those that follow Disney Plus are slightly more pure entertainment focused with Star Wars, gaming, film writing, and an affinity for actor Robert Downey Jr. dominating the segment distribution, while the Prime Video audience has a wider breadth including an affinity for CNN, and more authors and bloggers in the segment distribution.

Each of these production companies could use this segmentation information to craft more detailed and complex personas, which may help inform both the type of programming they create as well as which channels they use to market said programming.

How to Create a Persona

There’s no real right or wrong to creating a customer persona but, in general, specificity is your best friend. The more specific you are, the more real this person becomes, helping your team focus on the reality of who their consumers actually are, as opposed to who they might want them to be. (Creating aspirational personas is absolutely a worthwhile exercise, especially as you consider expanding your business or product lines, but it should be secondary to crafting personas from the data gleaned from market segmentation).

When creating a persona we recommend gathering all the information and expressing it in writing and pictorially (e.g. pen portraits, cartoon caricatures, and storyboards) to present an easy-to-understand snapshot representation of the person. A marketing persona considers their life from both a functional and emotional perspective, detailing their personality, values, actions, motivations, frustrations, etc.

Putting it All Together

With the growth of the digital age, organizations now have enormous volumes of data flowing into them on a daily basis. This presents several challenges: how to make sense of it all and how to differentiate between the really relevant information to form their target market(s) and all the ‘white noise’.

If the organization is, however, able to crack these codes they’ll be able to move ever closer towards an omnichannel ‘nirvana’. Furthermore, with social listening tools, the internet of things, propensity modeling, and predictive analytics making big data ever more sophisticated and readily available, there could even be enough information to create a "segment of one". 

But until that happens these traditional market segmentation strategies still hold great value for marketing professionals seeking to reach their target market on a more personal level.

Better understanding your audience is essential for marketing pros. Whether you're creating buyer personas or looking to conduct a market segmentation exercise, consumer and audience insights help you keep up with real-time audience trends. Contact us to learn how you can use Meltwater by simply filling out the form below to get a free consultation or check out more information about our Meltwater consumer insights tool.

This article was originally written by Ian Williams of Jericho Consulting for Business2Community.

Loading...