Want Better Marketing for Your Small Business? Start with Marketing Segmentation!

This is the first in a series dedicated to helping small business owners refine their marketing strategy to better align with their business goals. At the heart of any smart marketing is a single question: Who are your ideal customers? What are their demographics, firmographics, behavioral traits, and psychographics? Whether you’re on a sales call, answering emails, or engaging on social media, organizing this information is important for better sales.

See how to do so with marketing segmentation below.

What Is Marketing Segmentation?

Marketing segmentation is the process of dividing your customer base into distinct groups based on common characteristics. These characteristics could be geographic region, job title, company size, behavior, industry, or pain points.

It might make sense to have as many segments as possible. For instance, if you’re selling food manufacturing equipment, your sales pitch to an engineer segment would be very different than what you’d present to an operations segment. However, more segments mean more complexity and workload, which you may not have the bandwidth to manage.

On the other hand, overly broad market segmentation may be less effective due to a lack of personalization in your messaging. The sweet spot lies in finding segments that are large enough to message efficiently, but specific enough that your messages still resonate with real buyers.

1. How to Define Your Customer Segments

Using your existing customers, group them into buckets based on similar traits. A helpful exercise is to write short persona-based statements for each group, such as:

“As a production manager, I use social media to stay updated on equipment trends because I want to improve efficiency.”

Consider the following traits for your segments:

• Demographics: Job title, age, gender, location, and education level.
• Firmographics: Industry, company size, revenue, and decision-making hierarchy.
• Psychographics: Motivations, values, pain points, and risk tolerance.
• Behavioral Traits: Buying habits, channel preferences, and time to purchase.

Also, think about who your buyers are within each company:

• In smaller companies, the owner may be the decision-maker.
• In larger corporations, you may deal directly with procurement departments, department heads, or even dedicated vendor managers.

Understanding these dynamics gives you the power to tailor your marketing so your message lands where it matters most.

2. Quantify the Value of Each Customer Segment

Once you’ve segmented your customers, the next step is to quantify their value: project the volume of people and revenue per person in each segment. As you do so, here are several questions you’ll need to answer:

1. What is your Total Addressable Market (TAM)?
2. What portion of that can you realistically serve (SAM)?
3. What are your current conversion rates?
4. What are your average deal sizes?

Multiply the number of buyers in each segment by their respective conversion rate and average deal size to get segment revenue (SR). Next, prioritize and target the highest SRs in your marketing and sales efforts.

Special Considerations:

1. Brand Evangelists: Don’t overlook your customers who love and advocate for your business. These superfans are already primed to buy again, and with a bit of nurturing, they can help you grow through referrals, reviews, and repeat purchases. Launch hyper-targeted campaigns to capture more of them.
2. Deal Close: How long does it take to close a deal? Specific segments close faster, so dividing revenue per person by closing time may provide a more accurate metric for prioritization.

3. Give Each Segment a Name (It Helps More Than You Think)

Giving your customer segments memorable names can make your internal marketing discussions easier, more effective, and more human. Names quickly indicate the following: 

• Age Demographics: Names can hint at generational trends (e.g., Gen Zs might be named Jaxon or Zoe; Boomers might be called Bob or Linda).
• Gender Indicators: While not absolute, names can help visualize your ideal customer and tailor better messaging.
• Internal Clarity: It’s easier for your team to say, “Let’s focus on Evangelist Evan this month,” than “Let’s focus on our biggest supporter users” or design marketing materials that speak directly to the people behind your data

Choose the Right Channels to Reach Each Segment

Your next challenge is to reach your customer segments most cost-effectively. While you might be tempted to use every platform, your budget likely won’t allow it.

So, how do you focus your outreach?

Below is a breakdown of popular marketing channels and where they’re most effective. Use it alongside your segment’s behavioral traits:

• LinkedIn – Ideal for B2B targeting through InMail or organic posts.
• Email Marketing – Great for targeting, nurturing, and educating leads.
• Google Search (SEO & PPC) and Similar Search Engines – Captures high-intent buyers actively looking for your solution through search engine optimization and pay-per-click.
• ChatGPT and AI Platforms (AEO) – Emerging channel for Answer Engine Optimization or paid ad placements.
• Direct Mail (EDDM) – Effective for localized, tangible campaigns.
• Trade Shows & Industry Events – Build face-to-face relationships with niche segments.
• TV & Billboards – Broad awareness, best for large budgets and mass reach.
• Other Social Media Platforms (Facebook, TikTok) – Use both organic posts and paid ads to target by behavior and interests. Great for B2C and some B2B applications.

Remember, it typically takes seven touchpoints for a prospect to engage with your brand. Therefore, use multiple channels to get the needed touchpoints.

Use Marketing Technology (MarTech) to Derive, Analyze, and Leverage Insights

Your segmentation strategy might seem perfect, but real-world behavior can often surprise you: buyers are younger, and the changing industry landscape explains this. That’s why it’s critical to use MarTech tools to collect, analyze, and refine your strategy to remain current.

These tools make marketing less complex and do most of the heavy lifting for you:

• CRM systems (e.g., HubSpot, Salesforce) to track customer journeys.
• Analytics tools to understand which campaigns and channels are performing.
• AI-driven segmentation tools that dynamically cluster and regroup customer behavior.
• A/B testing platforms for experimenting with messaging and offers.

With the right tools, you can shift your strategy in real time. Maybe “Engineer Emma” ignores your emails but clicks on your LinkedIn posts instead. Your CRM can track this, enabling you to adjust tactics at every stage of a campaign.

Working with an experienced digital marketing agency can help. Agencies bring advanced tools and data modeling capabilities to identify segments you may have overlooked and to build more effective campaign strategies around them.

The Bottom Line

Marketing segmentation is the cornerstone of any successful marketing strategy, especially for small businesses that need to maximize every dollar. When you clearly define your customer segments, quantify their potential, and reach them on the right channels with the right message, your sales and marketing become more effective.

Start small, segment smartly, and use tools to test and scale. This is what we call our common sense approach!

Ready to take your marketing segmentation game to the next level? Contact us for help in segmenting your B2B, B2C, or DTC market today.