Figuring out how to leverage customer segmentation, let alone understanding what it even is, can be a challenge for many small-to-medium businesses.
HubSpot Marketing can help you as you try to find your ideal customer and then reach out to the correct buyer personas.
If you try to define customer segmentation by searching on Google, then you are likely to come away with more questions than you started with — “Great, now I need to figure out what an ‘ideal buyer’ and ‘demographic segmentation’ are too?!”
Another confusing term is “buyer persona.”
“Buyer persona” gets thrown around internet marketing blogs and conversation with the assumption, “yeah, we all know what this means.” But the reality is that many people outside the internet marketing industry don’t understand the term.
What is a buyer persona? And what is the difference between demographic segmentation, ideal buyers, and buyer personas?
Today, I’m going to define these terms, help you understand the distinction between these three concepts, and show you how to leverage them to grow your business.
What is the Difference Between Demographic Segmentation, Ideal Buyers, and Buyer Personas?
All three of these terms refer to various methods of defining your business’s target audience for marketing. These marketing methods are not exclusive and while the definitions are different, each one works best when supported by the other two.
But before I start defining terms, it helps to understand how these expressions relate to one another.
The easiest way to do this is to imagine that these terms are three layers on an onion.
- Demographic segmentation is the outer layer — this is where defining your market audience starts.
- Ideal buyer is the next layer down — you’re refining the results of the previous step.
- Buyer persona is the innermost layer of the onion — this is where your audience is the most defined.
Now it’s time for some definitions! Let’s start with the outermost layer of our marketing onion — demographic segmentation.
What is Demographic Segmentation?
Demographic segmentation, market segmentation, and customer segmentation are all different names for the same thing.
In other words, demographic segmentation looks at the identifiable demographics of your market (i.e. the people or businesses who buy your products or services) and uses these to optimize your marketing.
What Information Should Be Used in Demographic Segmentation for B2B Marketing?
The identifiable demographics you analyze change depending on if you are a B2C or B2B company.
For example, if you are a B2C, then you will define your audience using demographics like age, education, geography, sex, income, and occupation. But if you are a B2B, then the demographics you use will include the geography, size, products, and language of your market.
Other demographics you will want to research include:
- Social or business environment
- Buying decision criterium
- Price point
Beyond marketing, demographic segmentation helps you decide which new products to release and which service offerings to invest in. Therefore knowing what your market audience looks like is a powerful tool that helps you stay one step ahead of the competition.
What is an Ideal Buyer?
While demographic segmentation identifies your audience, creating an “ideal buyer” profile turns this data into a tool to be used in your marketing.
An ideal buyer profile is a screening tool that your sales reps use to decide which prospects to invest their time in.
Here’s how this works:
- Take the data from your demographic segmentation and ask questions like “which of these demographics do our most consistent/frequent/reliable customers come from?”
- Use your answers to create the profile of an “ideal buyer.” This is a person or company that is statistically likely (based on your segmentation data) to buy from you.
- Give this ideal buyer profile to your sales reps.
- When your sales reps are deciding which prospect account to really go for, they can compare the account with your ideal buyer profile. Do they match? If not, then the rep should move on until they come to an account that matches your ideal buyer.
In other words, creating and using an ideal buyer profile ensures that your company receives greater ROI from your marketing efforts. An ideal buyer profile helps you avoid wasting time selling to people who don’t want to buy from you and boosts your sales by helping you target those prospects that actually want to buy from you!
What is a Buyer Persona?
An ideal buyer profile helps your sales reps target the right accounts, but it doesn’t prepare them for the individual persons they will be talking on those accounts.
This is where buyer personas come in.
Buyer personas represent the individual managers, agents, representatives, and other people that will be making the buying decision about your product or service.
Why Do Buyer Personas and Segmentation Matter for Your Marketing Campaigns?
Because accounts that fit your ideal buyer profile may have similar business traits, but all those accounts are led by people who have different:
- Levels of experience
- Job titles
- Service/product knowledge
For instance, if you use the same pitch on every account that meets your ideal buyer profile, then you are going to speaking past the unique person on that account — and hey, people don’t like to be ignored!
Creating buyer personas enables you to speak directly to the unique person on each account in the language they want to hear.
This boosts your marketing ROI in three ways:
- You stop wasting time and money marketing to the wrong people.
- You start marketing to needs — buyer personas help you find the people who need exactly what you’re selling.
- You are able to take advantage of prospects’ wants — selling products or services that are tailored to your persona’s emotion-based desires. These emotions include:
Now that you understand what buyer personas can do for your business, I’ve dedicated the rest of this blog post to help you implement this marketing technique.
10 Step Checklist for Developing Buyer Personas
Now that you understand what buyer personas can do a lot for your business, here is a 10 step checklist to help you create your own personas.
Note: the term “ideal customer” in this checklist is not the same as the “ideal buyer.” “Ideal buyer” refers to creating an ideal buyer profile, while “ideal customer” refers to the individual person your sales team will contact within a prospect’s account.
- Define the type of business (niche) your ideal customers are working in.
- Define what you are selling. Hint: Market to Need, Sell to Want.
- Describe the challenges of your ideal customer.
- Describe what goals your ideal customer might have.
- Define what information your ideal customer needs at each stage of the buyer’s journey:
- Awareness – they know they have a problem.
- Consideration – they are considering options to solve their problem.
- Decision – they are ready to make a decision to buy.
- Outline personal information gathered from your demographic segmentation.
- Outline the professional information of this ideal customer.
- Describe the team relationships within the company you are selling to. Some examples include:
- Coach Who is Your Guide.
- Technical Buyer.
- Person Who Writes the Check (this is the best kind of ideal customer).
- Define the personal motivation for your ideal customer.
- Outline the BEST scenario where your IDEAL customer purchases your services.
Once you have an answer to each of these steps, you should know the following about your ideal customer:
- Their industry.
- Their day-to-day challenges.
- Their goals and motivations — both personal and company-related.
- What stage of the buyer’s journey they are in.
- Their age, sex, geographic location, and level of education.
- Their position within their company.
Combine all this information into a single profile and give it a name — for example, Marketing Manager Mike.
Congratulations! You’ve just created your first buyer persona!
Create a Marketing Campaign for Your Buyer Personas
Depending on your industry, it is likely that you will need to create several buyer personas — one for each kind of customer your team interacts with.
Once your personas have been created, it’s time to weaponize them for maximum marketing ROI. You do this by creating a unique marketing campaign for each persona.
Creating a marketing campaign requires the following steps:
- Perform customer segmentation research.
- Outline the ideal buyer persona you are targeting.
- Define top of the funnel offer.
- Define your bottom of the funnel offer.
- Outline automation — for example, automatic email marketing campaigns.
- Define marketing communication.
- Determine timeframe.
- Define marketing channels.
Developing an effective marketing campaign for each buyer persona can be a challenge. If you have encountered issues in your own campaigns, then it may be time to consider sitting down with an expert.
Here at Fannit, my team of internet marketing professionals has over a decade of experience creating buyer personas and their associated marketing campaigns. If you need help, whether that’s just asking a marketing question, or creating an entire marketing campaign, contact my team today.
Better buyer personas and marketing ROI is right around the corner!