No matter what kind of products or services you offer, entrepreneurs and small business owners should have a clear understanding of their target audience to improve their chances of success.  This involves putting in the time and effort to learn everything you can about your existing and potential customers, including important demographic considerations. A growing number of entrepreneurs and small business owners are using demographic segmentation strategy to fully understand their sales opportunities and drive key decisions, including product mix and placement, marketing and promotion techniques, and picking the right physical location.  The guide below discusses this strategy further.

What Is Demographic Segmentation?

Your existing and potential customers most likely include people from varied backgrounds, education and income levels, and overall life experiences. Demographic segmentation strategy takes a more in-depth look at these audience characteristics and differences to provide greater insight into their purchase decisions. By evaluating demographic markers like income, age, occupation, ethnicity, education level, gender, and housing choice, you can illuminate customer buying trends and new business opportunities that would normally go unnoticed.  

Demographic segmentation will also help to meet the increasing demand by customers for a personalized shopping experience.  Understanding and acting upon these individual preferences can improve the number of customer visits and dollars spent on each sale.

What Are Some Demographic Markers You Can Use to Make Decisions?

Once you gather as much data as possible, that is where the fun begins in finding valuable insights about your customers.  The analysis may show that a majority of your customers are families with small children, so picking a location near an elementary school or large daycare might be wise. Discover that your customers are primarily young, single and enjoy their weekends, then newspaper and radio advertising is probably out.  A better choice might be social media campaigns or live music events and food festivals.  Determine that your target audience older and keen on the DIY lifestyle, then target marketing in suburban areas with greater convenience to goods and services is a good idea. The key in all these markers and analysis is to find valuable insights that will lead to greater sales.     

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