The Beginner‘s Guide to Customer Targeting

The Ultimate Guide to Customer Targeting in 2023
In today‘s hyper-competitive marketing landscape, generic mass marketing is no longer enough to cut through the noise and connect with consumers. To capture attention and drive engagement, brands need to get strategic about who they‘re targeting with their marketing efforts and how.
This is where customer targeting comes in. By gathering data about your current and potential customers and segmenting them into distinct groups, you can craft more personalized, relevant marketing messages that resonate.
In fact, 80% of consumers are more likely to make a purchase when brands offer personalized experiences. And targeted ads are, on average, almost twice as effective as non-targeted ads.
So what exactly is customer targeting, and how can you leverage this powerful strategy for your business in 2023? Let‘s dive in.

What is Customer Targeting?
Customer targeting is the process of identifying and segmenting consumers into distinct groups based on common characteristics, then tailoring marketing strategies for each group. The goal is to focus limited marketing resources on the audiences most likely to convert, rather than attempting to reach everyone.

Customer targeting begins with market segmentation, which involves researching and analyzing data to divide the larger market into subsets of consumers with similar qualities. Brands can then develop unique customer personas embodying each segment.
These personas inform targeted messaging and personalized experiences to guide consumers through the marketing funnel towards conversion.

Common Customer Targeting Criteria
What specific attributes can you use to segment customers? Some common customer targeting criteria include:

Demographics: Statistical data like age, gender identity, race/ethnicity, marital status, income level, occupation, and education

Geographic Area: Physical location, including country, state, city, or even specific zip codes, as well as urban vs. rural environments and climate

Psychographics: More personal characteristics like personality, attitudes, values, interests/hobbies, and lifestyles

Behavioral: Actions and habits related to a product/brand, such as previous purchases, shopping frequency, brand loyalty, user status, and digital engagements (email clicks, social media interactions, etc.)

The most effective customer targeting strategies often combine multiple segmentation criteria to paint a more detailed, holistic picture of each audience persona. For instance, a high-end beauty brand might target urban millennial women with incomes over $75,000 who value social status and follow fashion/beauty influencers on Instagram.

Developing a Customer Targeting Strategy
Ready to get started with customer targeting? Follow these steps to research, create, and deploy an effective strategy:

  1. Set clear marketing objectives.
    Before diving into audience research, define your top-level goals. Are you looking to attract new customers, increase average order value, or promote a specific product? Clarifying your objectives will guide your targeting decisions.

  2. Gather audience data.
    Next, it‘s time to learn everything you can about your current and potential customers. Collect first-party data from your CRM, website and app analytics, social media insights, and surveys/feedback. You can also supplement with third-party market research.

  3. Analyze data for audience segments.
    Sift through your data to identify patterns and commonalities. Which distinct groups emerge based on shared attributes, needs, and behaviors? Aim to strike a balance between segmenting audiences granularly enough that messaging resonates, without creating so many micro-segments that marketing becomes unmanageable.

  4. Build out audience personas.
    Give each customer segment a name, personality, and backstory so you can step into their shoes and empathize with their perspectives. What are their goals, motivations, challenges, and hesitations? Where do they spend time online and off? Identifying with personas helps keep the audience at the heart of your targeting efforts.

  5. Map targeted content and channels.
    With robust audience personas in hand, brainstorm the types of messaging and experiences most likely to engage each segment. Which marketing channels and tactics fit naturally into their lives? For example, a busy suburban mom may respond best to targeted email newsletters and Facebook ads, while a Gen-Z college student may engage more with viral TikTok videos and influencer unboxings.

  6. Execute targeted campaigns.
    Once you‘ve mapped out your targeted strategy, it‘s go-time. Build out your creative assets and deploy them strategically through the appropriate channels for each audience. Align campaign flights with your overall marketing calendar for a cohesive brand experience.

  7. Measure, learn, and optimize.
    As targeted campaigns run, monitor performance closely. Are certain segments or platforms outperforming others? Analyze the data for actionable insights to test and fine-tune targeting parameters. Customer targeting is an ongoing process, so continue gathering audience feedback and analytics to keep personas and strategies updated.

Customer Targeting Best Practices
Effective customer targeting requires continuous experimentation and optimization. However, these proven best practices can help make your efforts more impactful:

Keep data accurate and updated. Audience segmentation is only as strong as the data informing it. Regularly clean your databases and refresh stale data to ensure you‘re working with the most accurate, current customer information.

Personalize with authenticity. Today‘s savvy consumers can quickly spot inauthentic, forced personalization. Look for natural ways to tailor messaging, offers, and experiences that add real value for each audience.

Test, learn, and evolve. The more you test different customer targeting parameters, the more you‘ll learn about what actually resonates with each audience. Experiment with new segmentation criteria and compare results to continually improve targeting precision.

Prioritize privacy and security. With growing concerns around data privacy, it‘s critical to be fully transparent about information collection and usage. Give customers control over their data and make sure you‘re complying with regulations like GDPR and CCPA.

Balance breadth and depth. Casting a wide net can increase reach, but it often comes at the cost of relevance. On the other hand, too many niche micro-segments can limit scale. Strive to find a happy medium between breadth and depth in your targeting strategy.

Customer Targeting Pitfalls to Avoid
For all its benefits, customer segmentation does have some challenges and risks to watch out for:

Stereotyping and bias: Segmentation can sometimes lead to oversimplified or inaccurate assumptions about groups. Avoid falling into stereotypes, remain aware of implicit biases, and look to data rather than gut instinct.

Lack of representation: In identifying target audiences, don‘t overlook underrepresented or often ignored consumer groups. Practice inclusive marketing to make sure your targeting and messaging reflects the full diversity of your customer base.

Irrelevant or invasive tactics: Not every touchpoint needs to be hyper-personalized. Restrict targeting to the most relevant moments to avoid seeming invasive or creepy. Give customers options to opt out of tracking.

Hitting the Wrong Target
To illustrate the importance of thoughtful customer targeting, consider this cautionary tale.

In 2018, makeup giant Sephora launched a new marketing campaign aimed at Gen-Z and millennial women. Central to the campaign were in-store events with free facials, makeovers, and beauty classes to drive foot traffic and sales.

However, the events generated significant backlash on social media. Many older customers felt alienated and complained the campaign unfairly excluded them or implied they were no longer valued by the brand.

Critics also pointed out that alienating older generations was short-sighted from a business perspective, as women over 40 tend to have higher disposable incomes for luxury purchases than the younger target demographic.

In the wake of the controversy, Sephora had to do damage control, apologizing for the misstep and reiterating their commitment to all customers regardless of age.

The lesson? Customer targeting is a powerful tool, but it requires nuance and sensitivity. Brands must balance tailoring to desirable segments with inclusivity to avoid losing the loyalty and spending power of broader audiences.

Bullseye on the Bottom Line
Despite potential pitfalls, thoughtful customer targeting is essential for focus and efficiency in an increasingly noisy marketing environment. It ensures you‘re investing valuable advertising budget and creative energy on the people most likely to engage and convert.

When you deeply understand your customers and prioritize their needs, preferences, and expectations, you can develop hyper-relevant marketing that cuts through the clutter and creates meaningful connections. You‘ll deliver more value for audiences and drive more growth for your business – a win-win.

So if you haven‘t yet fully implemented customer targeting in your marketing strategy, 2023 is the year to get focused. Your customers – and bottom line – will thank you.