How and why segmentation improves ROI

Abstract

The advantages to selecting and appealing to a priority target audience segment are similar to the advantages of knowing what kind of fish you want to catch when you head out on a fishing trip. (1) First, you’ll know what bait to use. Knowledge about the segment’s unique demographics, psychographics, geographics, related behaviours, stage of change, barriers to overcome, and benefits to promise will inspire a unique offer, one where product, price and place strategies are “custom” designed to appeal to the segment you want to attract. (2) Second, you’ll know what kind of hook will help “seal the deal”. Knowledge about what appeals most to your target audience about your offer will help craft persuasive messages, choose credible messengers, and develop engaging creative elements. (3) Third, you’ll know where to go to find them. Knowledge about the unique media channels that the target audience uses will help you select those channels most likely to reach the greatest numbers, with the least amount of expenditures. (4) Fourth, you’ll know when they are typically looking for food. Knowledge about unique openings for the segment will inspire the frequency and timing of media placement and selection of the most effective decision points, or situations, when the target audience is most likely to be tempted by your offer and persuaded by promotional messages. In the end, by tailoring the 4Ps for an attractive market segment, not only will you “catch more of the fish you want most”, you will accomplish this with less time and money, therefore increasing your return on investment (ROI). This chapter will describe each of the four unique advantages in more detail and will then outline the steps involved in calculating a ROI for your efforts. A hypothetical example using diabetes prevention will be used to illustrate the application of the 4Ps. In addition, a brief case story for each of the 4Ps will illustrate how strategies can (and should) be targeted to the unique profile of a target audience. It should be acknowledged that the 4P model used in this chapter is based on the traditional commercial marketing “labels” for the major tools in the marketer’s toolbox-ones available to the marketer to influence a target audience to buy their product. Labels, descriptions and the number of tools that social marketers use to influence target audience behaviours can vary (Peattie and Peattie 2003; Tapp and Spotswood 2013).