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Consumer Segmentation

Ask yourself a series of strategic questions:
- do you know who your customers are?
- do you know the characteristics of your customers?
- do you know what influences your customers when making purchasing decisions?
- do you know where your customers live, work and play?
- do you know who amongst your customers are the most profitable and those who are a drag on your resources?
- do you know who else can be a profitable customer yet is currently not being served by your company?

In other words, do you segment the entire population within your market (not just customers) into relatively homogeneous groups that can be measured, analyzed, and targeted?

Consumer segmentation is the process of classifying people into groups that have some set of similar characteristics, resulting in the ability to be studied and targeted.

The most basic method is to segment by simple demographics such as age, income, or marital status. The goal is to identify relatively homogeneous groups with similar behavior that will assist in customizing the message and/or offer for each segment.

Some companies target only one macro group, such as the AARP attracting anyone 50 years old or older. Others have much more sophisticated segmentation schemes, using dozens, or even hundreds of variables.

The advent of accessible computer technology, the development of new statistical methods, and the availability of US Census data have all contributed to a whole new industry specializing in multi-tiered consumer segmentation. Add to this the standardization of geographic definitions and you now have a powerful basket of measurable variables that can help segment the population in a very detailed fashion.

XTREMEimpakt offers you the ability to classify, study and target consumers (both your own customers and the general population) using two different, yet partially correlated segmentation typologies:

1 Geodemographics
2 Psychographics

Both systems provide you with incredible insight into the consumer market, generating results that are both measurable and actionable.

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In general, this segmentation method links the sciences of demography (the study of human population dynamics), geography and sociology. Its premise is that people with similar cultural backgrounds, means and perspectives naturally gravitate toward one another, resulting in relatively homogeneous communities (birds of a feather flock together).

The theory goes, once settled in, people naturally emulate their neighbors, adopt similar social values, tastes and expectations and, most important to marketers, share similar patterns of consumer behavior toward products, services, media and promotions.

Thus, you are able to classify neighborhoods and their households into clusters or groups of neighborhoods based on their underlying socio-economic and demographic composition.

A number of companies specialize in geodemography, applying their own set of variables and segmentation techniques to delineate the entire US population into a number of clusters that are large enough to provide substantial distinctions between groups, yet are small enough to be manageable.

You can use these clusters to segment your customer base, identify profitable groups, find new customers, locate sites for stores, buy advertising, target direct mail, guide promotional activities, and develop new products.

XTREMEimpakt is in a position to help you incorporate geodemographic segmentation into your marketing strategy. Very quickly you will see your customer base in a whole new light. You will be able to isolate groups that are most profitable (and least profitable), then build a highly targeted campaign to attract those individuals of most interest to your company. You will then be able to measure the effectiveness of all your marketing elements and make educated adjustments and refinements for each subsequent round of marketing and promotional activities. Learn more >>

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To further target your marketing efforts, you should have a method to not only determine who is or will buy your product, but identify what makes them want to buy as well.

Psychographic segmentation is a powerful method to delineate consumers based on their personalities, values, attitudes, interests, and/or lifestyles - - that is, you are identifying and measuring those attributes (behavioral, economic and interpersonal) that drive consumer behavior.

As part of our underlying objective of developing marketing and promotional programs that make an IMPACT, we have partnered with the top provider of psychographic segmentation to identify the motivations of your best customers and prospects, thus leading to the most effective message and method of delivery. Learn More >>

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Every segmentation typology on the market today includes some sort of link to geography. This, of course, is critical because your marketing message needs to reach your customers and prospects. And, as stated earlier, knowing where different clusters of people live gives you the opportunity to target your activities in the most efficient and effective manner.

Thus, analyzing your target population according to geographic boundaries (such as zip code, census tract, postal route, etc.) gives you an organized and easy-to-understand method to identify where you are strong, where you are not reaching your target, and everywhere inbetween.

But geogrpahic analysis does not just consist of generating reports. With the advent of geographic information systems (GIS), marketers are able to actually map analysis results. Thus, you can see different population variables based on their physical distribution.

Often, once mapped, you get a very different perspective of your marketplace. Literally within seconds you can see where your customers reside and how your target population clusters are distributed. Very powerful stuff!

Because segmented geography plays a key role in determining the level of IMPACT, we have partnered with one of the leading providers of GIS. We are thus able to offer you vivid insight into the market you serve. Learn more >>

So contact us to explore the opportunities.

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