What is Geographic Segmentation and how to put it to work
Geographic segmentation is a marketing strategy to target products to people who live or shop in a specific location. This approach is particularly useful if you sell products that are subject to differences in regional culture, climate or population.
There are many possible examples of US-based organizations that may use geographic segmentation:
- A maker of pool supplies will focus on warmer, sunnier climates
- A liberal political action group will have more successful fundraising in the Pacific Northwest instead of the Southeast
- A clothing retailer will cater its inventory according to the weather and styles of its store locations
- Restaurant chains customize their menus according to the local tastes and ingredient availability of their areas
- Local businesses open locations in areas where the average income is appropriate for the cost of their goods
- Home security companies may have more success focusing on high-crime areas
- Retail businesses are more likely to be successful in high-population areas
- Healthcare organizations may wish to provide Spanish language service options in areas with large Hispanic communities
How to build a geographic customer profile
There are many tools that can help you lay out a geographic segmentation strategy.
One of the first tools businesses turn to in order to understand the geographic preferences of their customer base is to conduct survey research. Here are some survey research approaches you may want to consider:
- Take a random sample of your customer base and ask about their product preferences. Filter the results by region to breakout geographic preferences.
- Use conjoint analysis methodology to rank order product traits using trade-off questions and filter results by state or region to understand which regional differences exist.
- Test your messaging and advertising concepts with prospects in different areas to understand where different messages are well or poorly received.
- Survey your employees in different regions to understand how engagement may affect the customer experience they are providing per region.
- Check your operational sales data to see where product sales are increased or decreased by region
- Consider trends in seasonality to understand how they affect your sales by region
- Combine your sales operational data with your customer experience and survey data to pick up trends by region
- Use web traffic tracking patterns by region to see where your traffic is coming from
- Conduct analysis on the types of products that ship to various regions to pick up differences in purchase preferences
Mobile usage data
Mobile devices present unique opportunities to better understand customers by very specific location – sometimes down to the foot. By using app-based location services available with most smartphones, you can send the right message at the right time with pinpoint accuracy.
Social media profiles
Social media data can provide tremendous insights into the location preferences of your customers and prospects. Many social media platforms even allow you to target messaging by area or zip code.
Secondary data sources
Many third-party technologies and agencies specialize in helping you to build and execute a geographic segmentation strategy. Claritas PRIZM, Carto, and ad platforms like Google and Twitter are often able to help you target the right prospects in the right locations.
Overall, geographic segmentation is a strategy that is crucial for any organization that provides services that vary based on regional factors like climate, local styles, distribution differences, channel availability, culture or values. Employing an effective marketing plan based on geography can be a key competitive advantage for organizations that understand how to “think local.”
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