Actionable Segmentation Goes Beyond Demographics

A truly actionable market segmentation goes beyond simple demographics or firmographics. While it's helpful to know the age, gender, and location of your customers, this information is often not enough to create a truly effective positioning.

A more powerful approach is to segment your market based on a combination of factors, including:

Psychographics: Their attitudes, values, and beliefs.
Behavioral traits: How they work, what tools they use, and what their pain points are.
Needs and goals: What they are trying to accomplish.
Other products they use: This can give you clues about their technical sophistication and their willingness to pay for software.

For example, instead of targeting "small businesses," you could target "small businesses that use QuickBooks and send more than 100 invoices a month." This is a much more specific and actionable segment, and it allows you to create a positioning that is tailored to the unique needs of that group.

By going beyond demographics, you can create a segmentation that is not just descriptive, but also predictive of who will be a good customer for your product.

Related Concepts: