Hey you 👋 If you’re reading this but haven’t subscribed, join 326 curious, entrepreneurial-minded folks by subscribing here:
In Tip #7, we’ve shared with you a simple tool to select the target group you should focus on. Today, we present 6 customer segment strategies you can adopt.
Multiple customer segments
You might be able to solve the problems of several customer groups or subgroups. Can you create one offer to different customer segments instead of customizing everything? Try to derive what all of your customer segments have in common. Then try to see if you can easily adapt your offer for different segments. Then, ask yourself who could be the most profitable one?
📙 Amazon Web Services offers a suite of cloud computing services, which make up an on-demand computing platform for customers of all sorts and sizes; e.g., online content provider Netflix can support a seamless global service by using AWS, while Avianca Brazil, a Brazilian domestic air carrier, uses AWS to host content for its marketing department.
📙 Emirates offers the same product - flying from A to B - in fine segmentation with different benefits to their customers: Economy Saver, Economy Flex, Economy Flex Plus, Business Saver, Business Flex, Business Flex Plus, First Class Flex, First Class Flex Plus.
Least satisfied
Instead of focusing on customers who are satisfied with the status quo regarding your solution, focus on the ones who are very unhappy.
📙 Zara. The fast-fashion retailer Zara sets itself apart from H&M for instance, by offering its customers the latest fashion trends in a very timely manner. The highly integrated business model allows for a very quick response to fashion changes, reducing or increasing production as necessary, introducing new lines, etc., all of which its competitors have not been able to offer their customers.
Mass Market vs Niche Market
Successful companies typically start out in niches before going for mass markets. To be successful in a niche, companies typically offer very specific products. But sometimes it makes more sense to go for the masses, instead of segmenting the market.
📙 Facebook. Facebook started with campus students before becoming a social media platform for the mass market.
Target the rich
Select the customer segments that pay the most or generate the highest profitability for a specific product.
📙 Rolex. The luxury watch brand Rolex has consistently sold to an upper-class target market, which mainly consists of men over 35.
Target the poor
This significant group of customers especially benefits from affordable products, while the company profits from higher sales numbers due to the target size, as opposed to a high-profit margin.
📙 Grameen Bank. The Grameen Bank is a Nobel Peace Prize-winning microfinance organization and community development bank, which offers small loans (known as microcredit or “Grameen credit”) to the poor without requiring collateral.
Non-customers
Try to identify which group of people is currently not buying or consuming similar products or services you plan to offer. Sometimes, there could be a chance to win them over as customers with a slightly different value proposition/product offering.
📙 Nestlé. As demand for halal food and drinks is growing increasingly around the world, Nestlé has started to display a certifying symbol on some products in order to attract customers that are conscious about purchasing according to halal standards.
🏄 Was it useful? Help us improve!
With your feedback, we can improve The Tipsletter. Click on a link to vote and drop us a comment:
📤 Help other entrepreneurs, Share this newsletter
See you soon guys 🤙
Nico, Marie, Raquel