Can you describe ONE clear niche or segment that your product or service fits? If so, it’s easier for your prospects to remember….and be meaningful to them. Remember most people try to be all things to all people. That’s a recipe for failure!! It’s hard to focus & narrow your audience.
You’ve probably heard it before…..but what is market segmentation anyway? Why is it important? Well, easier to associate. Easier to remember. Top of mind awareness….remember that phrase? Most marketing experts will tell you that the first 1 – 2 Brands that your audience recalls….top of mind….probably has the leading market share. That’s why this is important.
A segment is simply a grouping or cluster of similar characteristics of your product or service. So for your industry…..we can draw out a simple diagram. Think of a continuum from left to right. From low (on the left) to high (on the right.) Low to high on what? Things like: speed of service, quality, variety of features, price, etc. Think about competition and group them into various clusters.
So for example….take the hospitality business or hotels.
Consider Marriott as a hotel: full service, restaurants, ballroom, meeting rooms, appeals to business and personal travelers. Place it toward the right side….maybe ¾ of the way…pricing about $150 – $200 per night depending on the city. Competition would be: Hilton, Sheraton, Hyatt, etc.
Suppose you want to compete on price….more reasonable, but less features. Place to the left of Marriott a segment called limited service. Appeals to business travelers….restaurant really only for breakfast….meeting rooms, but small size….pricing about $69 – $129 per night. Think Courtyard (oh, by Marriott by the way.) Others are: Holiday Inn, Radisson, etc.
Further to the left would be…..economy segment. Restaurant is only continental breakfast, limited….very small meeting rooms, not many….pricing $49 – $99 per night. Think Fairfield Inn (oh again by Marriott….get the picture.) Others are: Hampton Inn, Holiday Express, Motel 6, Drury Inn, etc.
Now go to the far right….luxury segment. Destination locations with maybe golf course or beach resort or mountain setting. 5 star quality and amenities….many restaurants…variety of meeting rooms….recreation activity….pricing maybe $199 – $400 per night. Think Renaissance (gee…owned by Marriott) or Ritz Carlton or Luxury Collection.
I think you get the idea. You can play in just one of these segments or multiple. If you choose more than one….don’t use the same name….it will confuse your customers. Follow the way Marriott Corporation has developed Brands to suit each segment.
Divide your audience opportunities….offer DIFFERENT features for DIFFERENT prices….and you too can increase your market share. Study and analyze the SEGMENTS in your industry…..it’s worth it.