Tag Archives: startup

The Few, Not The Many: Segmentation for Start-ups

Traditionally marketing teams can segment their target audience by any number of variables resulting in numerous segments on which to focus their marketing messaging and campaigns. For start-ups the temptation to ‘target’ everyone who could be a potential user can be immense. However when looking at segmentation for an early stage start-up the key is to focus on the few, not the many.

Fewer is faster and betterStart-up Segmentation

Given tight resources and fierce competition generally start-ups need to focus on one key segment and win it. By targeting just one segment you can better focus your product, messaging and marketing strategy on the needs of that segment, giving yourself a better chance of success. In addition by concentrating on just one segment you have a better chance of reaching product-market fit faster as you’ll be really focused on solving the problems of just one core group of users.

If groups require different distribution channels, relationships, offers or pricing they are distinct segments. Pick just one!

As always there is an exception, if you’re launching a marketplace type business where you need two groups, for example buyers and sellers, then you will have to target both segments and develop and execute marketing strategies for both groups simultaneously.

Picking that one segment

In picking the best segment to focus on think about the core group of potential users who really feel the problem that your product or service solves. People who feel the problem the most acutely will be highly motivated to try things that could help them solve it, and they may even be searching for a solution already making it much easier, and less expensive, to acquire them as users.

Get to know your chosen segment as best you can, understand who they are, what motivates them, how they’re currently dealing with the problem you solve and how it impacts their daily lives and of course understand what media they consume and how you can reach them and communicate with them. Use this in-depth knowledge and understanding of your audience to develop a highly targeted marketing plan that will communicate effectively with them and motivate them to adopt your product or service.

An additional benefit of this strategy is that users who feel the problem you solve most acutely are likely to be delighted if you can solve their issue and are therefore most likely to tell people about you and share your product or service with their friends.

Rinse and Repeat

Once you’ve achieved success in your chosen segment you can begin to expand to the next segment, working through each segment by order of how strongly they feel the problem you’re solving and also how similar they are to your previously successful segment. As you enter each new segment you can tweak the marketing strategy you’ve used previously to make it relevant to the new audience’s needs, media consumption and so on, plus use the learnings you gained from your previous experiences to improve and optimise how you market to this new group.

Avoid the temptation to target everyone who could possibly use your product and you’ll be able to get to know your customers better and be able to focus in order to achieve success more quickly and more cost-effectively.

 

All does not end with Acquisition, Focusing on Conversion

It always amazes me how much time, effort and budget is spent by startups on getting more visitors to their websites. And then what. For the vast majority the job it seems is done. When in fact the job is only just beginning. Letting people know you exist and encouraging them to visit your website is only the first step in the process. Next you need to engage and encourage them to do something, take some action, register, sign-up, maybe even pay!

So what should you be doing and how can you do it? Conversion Rate Optimisation or CRO is the answer but where should you start?

Conversion Rate Optimisation
All does not end with acquisition. Focus on your conversion funnel to improve ROI

First of all you need to decide what the goal is. What is it that you want new visitors to your website to do? Depending on your product or service this could be to subscribe, pay, start a free trial or register. Decide on your goal and then review your homepage and landing pages to ensure that everything is leading them towards this goal. You’ll want to make sure that the call to action is prominent and easy to access, plus that nothing else is distracting user from completing the goal.

It’s a good idea to walk through each of the stages in the process to see how difficult you’re making it for users to complete these steps. Tiny changes to your calls to action or registration forms can have a big impact.

Next you’ll want to put some numbers against these steps. Hopefully you already have tracking in place (if not its time to get some!) and can easily put numbers against each step in the journey to show how many people arrive at and complete that stage. This will allow you to objectively see your conversion funnel, pinpointing major pain points that require urgent attention and helping you to consider steps that can be removed or bypassed, to boost the number of people completing the funnel and reaching the goal.

User testing and user feedback can also be hugely helpful in CRO. The process of watching and listening to real users as they struggle to find what they need on your site can be a real eye opener. However that’s a topic for another day.

Improving your conversion rate can help you to improve the ROI of your overall acquisition spend, by making it easier for each user acquired to achieve the desired goal. For example imagine you’re an online dating business spending £10,000 per month on acquisition. However your homepage conversion rate is 20%, meaning that you lose 80% of people on the first page. By focusing on CRO and what happens after acquisition you could reduce your drop-off rate considerably and make that £10,000 spend go an awful lot further in terms of real registered or paying users. By focusing on optimising your conversion rate you’ll make every £1 spent go further.

So before you decide to focus all your time and effort on acquisition take a look at your current conversion rate and fix any leaks in that funnel.