Business Planning Considerations: Segment Customers into Buyer Groups - dummies

Business Planning Considerations: Segment Customers into Buyer Groups

By Steven D. Peterson, Peter E. Jaret, Barbara Findlay Schenck

By determining which customers share similar interests and buying habits for your business plan, you can segment customers into buyer groups and target offerings to groups of people who respond in similar ways.

Consider the example of an urban apartment complex renting to affluent city residents. After gathering customer data, the complex managers found that renters from the immediate market area chose the complex for its quality accommodations, but even more so for its pet-friendly policy. On the other hand, renters moving from more distant locations chose the complex for its quality, but even more so for its apartment interiors, terraces, and views.

Studying further, the managers learned that tenants moving from out of area fell into two categories: those seeking small apartments with short-term leases, either because they were moving for temporary jobs or because they were renting while searching for a home purchase, and those seeking larger apartments with longer-term leases, which they would make their primary residences for the foreseeable future.

Armed with this information, the managers used ads and social media posts to reach local residents with a pet-friendly message, distributed flyers through employers and real estate agents to reach people seeking short-term, small-unit accommodations, and hosted events and test-drive overnight stays to reach those considering the building’s apartments as long-term homes.

Include a summary of your market segmentation analysis in the business environment section of your written business plan.