Market segmentation by lifestyle (a great way to grow share of customer)

Two marketing terms you hear thrown around a lot are “market segmentation” and “share of customer”.

Market segmentation basically means taking this thing called “the market” and recognizing that there really is no “the market,” but instead multiple markets of prospects with similar characteristics, wants, needs, etc. So what you do is to take “the market” and break it into relevant groups called segments. Your marketing strategy then becomes going about targeting a segment or multiple segments with value-based messages aimed at differentiating yourself from your competitors who are trying their best to win those same customers (which is where positioning comes in).

Share of customer simply means getting more business from your existing customers. Often the term is used to describe how to get your existing customers to buy what they are currently buying, or plan to buy, from your competition to buy from you instead.

Here’s an example of how DeBeers Diamonds has done a sparkling job of using market segmentation to grow share of customer. For one thing, they have taken “the market” and divided potential customers into like groups based on stages in the customer’s life or life style. For those who are just friends, they offer friendship rings. For those who promise to maybe offer a deeper commitment one of these days they offer promise rings. For the  about-to-be marrieds, they market engagement rings. For those who are married there are anniversary rings, motherhood rings, eternity rings, etc., all of which help commemorate various stages the customers go through in their lives.

They are segmenting the market by these stages, and simultaneously gain the opportunity of growing share of customer by having something to offer the same customers  as they progress through these different stages of life.

Smart way to mix and match!

The real voyage of discovery consists not in seeking new landscapes, but in having new eyes.” – Marcel Proust