How Benefit Segmentation Elevates Your Marketing Efforts
Purchasing decisions aren’t just single-focused.
They are an incredibly complex and psychological process where customers have to consider a variety of factors before handing over their money.
Whilst one customer might purchase a handbag because it has numerous pockets, another might like that it’s water-proof and weather resistant.
Understanding their rationale – and what motivates your audience – could be critical to the success of your marketing.
If you’ve been suffering from below-average conversion rates (2.35% on websites) or very little engagement on your digital platforms…
You might need benefit segmentation.
Table of Contents
What is Benefit Segmentation?
Benefit segmentation is the process of sorting, dividing and clustering your target audience based on the main reasons why they would purchase your product. It involves calculating the perceived value your brand can offer to the end consumer, and then selling to your audience based on their priority.
What is Benefit-Sought Segmentation in Marketing?
In marketing, then, segmenting by benefits-sought is an incredible tool.
Once you understand what drove and motivated your existing customers to make a purchase, you can apply this knowledge to identical lookalike customer personas and use it to convert more leads.
Instead of trying to sell your product in a way that isn’t relevant to your target consumers, you can identify exactly what they need and cater your approach accordingly.
How? By demonstrating product value and adopting benefit-led selling.
Why Do You Need Benefit Segmentation?
Acquiring leads isn’t easy.
PPC strategies are not only a lengthy and time-consuming process, but they are expensive and have no guarantee of success… especially if you’re using the wrong messaging.
In today’s crowded environments, to increase your chances of securing a sale, you need to have an emotional connection with your audience.
That’s what benefit segmentation marketing is for.
In 2022, the average cost per lead (CPL) ranges from $34 in Retail to $208 in Information Technology. This is a worrying cost for many business owners.
By segmenting by benefits-sought, you can personalize your approach, make your outreach more effective, and reduce wastage to stand out from the 75% of advertising professionals who don’t use behavioral data to inform their targeting.
The Power of Benefit Segmentation Marketing
80% of consumers are more likely to buy from a company that provides a tailored experience that feels unique to their needs. When an advert cuts to the “nitty-gritty” of the pains they are experiencing, it is much more likely to convert.
Still, there’s more.
Benefit-sought segmentation is the first step in starting to build a relationship with customers, who subconsciously recognize that you understand their desires and can provide the solution.
Marketers who add this strategy to their arsenal see higher customer lifetime values, resulting in ongoing brand loyalty and impressive return on investments. Through benefit segmentation marketing, you can gain a deeper customer understanding of the audience you want to communicate with and design a clear approach for your content strategy going forward.
No more blind guessing.
3 Examples of Benefit-Sought Segmentation
Businesses have been segmenting by benefits-sought since the dawn of time. As such, you can start to understand the motivation behind some advertisements you may have seen.
Benefit Segmentation Example 1: Newman’s Pizza
Ever been watching your weight but had a craving for some delicious pizza? You’re not the only one.
A simple Newman’s advert published in 2020 successfully:
- Targeted health-conscious food lovers.
- Promoted the natural ingredients they use.
Although their pizza can be enjoyed by anyone, they recognized the needs of a small portion of their audience and designed their advert accordingly, using strong imagery to tell a relatable story.
Benefit Segmentation Example 2: Apple
The next advert was published by iTunes internally on their platform. It directly addresses the portion of their target audience that listens to music as a form of escapism. Apple could have focused on a variety of other benefits to music (like how it reduces stress levels), but, instead, chose this niche approach.
Benefit Segmentation Example 3: Ikea
This Ikea advert was published with a simple tagline… “Need space?”
It involves a clever use of visualization that resonates with couples struggling for storage, and was designed to sell the HEMNES cabinet.
How to Segment Your Audience by Benefits-Sought
Applying benefit segmentation to your own marketing doesn’t have to be complicated.
Step 1. Research Consumer Perceptions
Before you can design marketing materials that connect with your audience, you need to understand what motivates and drives them. Take a look into:
- how consumers view you and your products
- what benefits are most likely to encourage them to make a purchase
- whether any value gaps are present that could damage your marketing efforts
Step 2. Divide Your Audience into Groups
Once you understand your audience a little more, you can start to divide them into like-minded groups (otherwise known as segmentation).
To do so, first define why you’re grouping certain people and then determine what characteristics set them apart. Finally, you can start to decide what messaging is relevant to everyone and what will only work for specific groups.
Accurate benefit segmentation can result in a 300% improvement in marketing engagement, open rates, reach and conversions.
Step 3. Create Purpose-Specific Marketing Materials
Use a variety of targeting platforms, like LinkedIn or Google Ads, to create and distribute purpose-specific marketing materials. This might involve sending a customized email to a small portion of your list or approaching a new audience with an impactful message.
Step 4. Make Relevant Improvements to Your Benefit Segmentation
As you start to implement your new marketing strategy, you might find that you’ve placed some customers in a group that doesn’t align with their interests.
This is completely normal. There’s always room for improvement.
- Track a variety of metrics and don’t be afraid to reassign customers.
- A/B test a variety of different approaches, such as CTAs.
- Assess what works and what doesn’t for each group.
Step 5. Add Additional Benefits to Your Products and Services
Never be afraid to drive your company towards continuous improvement and expand the value you can offer to your customers.
Where one professional used to value saving money above all else, they might now want to save time, instead. Can you help with that?
Step 6. Celebrate Your Success
An important element of every marketing strategy is to take the time to celebrate your success.
When you convert leads or increase traffic and engagements through segmenting by benefits-sought, make sure to recognize the hard work you (and your team) have put into acquiring more leads.
Benefits-Sought Segmentation – FAQs
Before you begin benefit segmentation marketing, check out these helpful FAQs for a little extra guidance.
What is segmentation?
It’s the process of dividing your target market into groups of people with shared needs and/or behaviors (such as their income, demographics, or background).
What is benefit segmentation in business?
The grouping of markets, customers, and stakeholders according to the top benefit they seek from a product. Your sales approach should then be adapted to resonate with their specific priorities.
What are the advantages of benefit segmentation?
It allows you to design adverts and content that will best resonate with your audience, rather than trying to speak to everyone and having success with no one.
Userlane’s Contribution to Benefit Segmentation
If you’re a software service-provider looking to adopt a benefit-led sales approach, Userlane’s Digital Adoption Platforms can help.
- Guide and support your users.
- Reduce troubleshooting.
- Increase adoption rates.
- Instantly make software easier to grasp.
By working with Userlane, you can add to your value stream and increase the number of benefits you can offer to your customers.
Request a demonstration today.