Segmentation, targeting and positioning – it’s about quality, not quantity.

One of the most important steps in the development of a marketing strategy is the process of segmentation, targeting and positioning, or STP for short.

The STP process seeks to analyse an organisation’s data in an attempt to find segments within the total dataset, which have a similar profile, characteristics, wants, needs, aspirations, problems, etc.

Instead of trying to approach the entire market with an undifferentiated strategy (i.e. the same proposition), STP allows organisations to divide the market into segments based on similar factors. The number of segments you create is dependent upon your marketing objectives and dataset.

Once the segmentation process has been completed, the next step is targeting.

Targeting seeks to identify the most attractive segments, which are usually the ones most profitable to the business or those that represent the greatest chance of meeting the defined objective[s].

Targeting can involve focussing on the ‘low hanging fruit’ or segments which pose a longer-term strategic opportunity; it does not mean that you must target each segment identified in the initial stage.

Once the market has been segmented, and the most favourable groups have been targeted, the next stage is positioning.

Positioning refers to how a proposition is packaged up to appeal to the defined targets. What are your propositions competitive advantages or key differentiating factors? What do you want potential customers to think when they encounter the proposition? The aim is to create a positioning concept which will resonate strongly with the target segments.

The STP process can also allow for A/B testing or the development of audience-specific messaging. For example, if you were not sure which proposition or which message would work with audience A, then why not try 2 or 3 variations and see which option delivers the strongest response?  STP allows you to develop audience-specific messaging and time delivery to a point that will resonate with your audience (such as renewals or seasonal opportunities).

Data management

The STP process is heavily reliant on your organisation’s customer data, its accuracy and your ability to quickly mine through it for opportunities. A CRM system will allow you to conduct the process with relative ease, but if you don’t operate a CRM, spreadsheets or paper records can work, too.

Whatever method you choose, your ability to manage your data is fundamental. Without it, you cannot perform any meaningful analysis of your data and your marketing output will be compromised as a result.

Meeting your regulatory obligations

As we move towards a new age of data protection regulation (GDPR), each organisation must be able to demonstrate compliance with regulatory obligations. Data management and segmentation will help you to demonstrate which data segments are being processed under which lawful basis. You could manage multiple segments which are processed under separate lawful basis dependent upon their stage in the customer journey (i.e. 'consent' for prospect marketing and '... the fulfilment of a contract...' for clients).  

Conclusion

For many businesses, client data is their bedrock. Without the ability to segment, target and position appropriate propositions, your marketing and data management efforts will be severely compromised.

Tailored messaging helps to strengthen the one-to-one relationship that many organisations seek with their clients. It also serves as a clear brand differentiator that helps to tackle distrust around the use of personal data.

Ask yourself, do you want your marketing to be highly personal, specific and relevant to the recipient, or would you rather it was the same for everyone regardless of their needs and requirements?

About the author

Peter is an award winning marketing professional who has worked for some well known brands within Wales and England. He is a forward thinking marketer, who is always looking to enhance the customer journey and experience as well as to attract new clients to the company through innovative and value added strategies.

Peter Townsend

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