• Personas vs. Market Segmentation

    After presenting the concept of personas to our clients they are confused because they think persona development is the same thing as market segmentation. It’s important emphasize that they’re not the same. However, persona creation relies heavily on market segmentation. In order to create personas you need to understand the market segmentation and the various customer profiles you compiled by your team. Segmentation and all that it entails is the means to generate the personas for your site.

    Market Segmentation is the division of the market or population into subgroups with similar motivations. Widely used bases for segmenting include geographic differences, personality differences, demographic differences, use of product differences, and psychographic differences.

    Every company, online or offline must understand the market they are working in and how to better cater to their ideal customers. You can go in-depth and view the various demographics and similarities within the market in order to create segmentations and narrow the target market. And in order to create the ideal, target customer, the information must be quite detailed.

    So that’s just it, an in-depth look at your market. But you are still “catering to the masses.” Let’s take a company like Moz, a leading search engine optimization firm. By the nature of its business, Seomoz is a B2B company. So, although I will draw from this example there are discrepancies between B2B and B2C segmentation and persona development that I will discuss throughout the series.

    The market segmentation for Seomoz would include considerations such as target company net income, target company sector, target company size, web presence, geographic location, and the potential need and use of the service.

    The current minimum search engine optimization package at Seomoz is at a minimum of $10,000/month. That translates into a starting annual commitment of $120,000 for search engine optimization. The average spending on SEO counts for about 20% of the marketing budget for mid to large size companies. That puts the starting marketing budget for any company that hires Seomoz at $600,000 per year. The majority of large companies budget about 10% of their budget into marketing. That means the minimum revenue for the target client of Seomoz translates into $6,000,000.

    With that simple math, you are able to eliminate many small companies who do not have the revenue level to be able to afford the services of Seomoz.

    Now, what is the difference between the market segmentation and persona development? Let’s assume that Seomoz targets B2B companies within the financial and technology sectors. Within each sector there are differences such as geographic location, company net income, and size. How does knowing the target or segment market help in creating the webcopy? If Seomoz targets companies in the financial sector, they might choose to use terminology that is familiar to those working in that sector. The problem with that approach that it is the targeting becomes too generic and too vague. However, pinpointing the individuals they will be selling the SEO service to will be more effective. Understanding the decision-maker’s characteristics, personality traits, and overall demographics will help Seomoz develop a more targeted copy to address the concerns, motivations, and FUD’s of these companies through the yes of the person in charge.

    For every segment you must come up with the profiles of the people you are aiming to sell to through your site. Once that is complete you may find that you have 4 profiles that generally represent your entire market. Each profile can than be taken and molded into a persona.

    For example sake we will come up, based on the little data we have, with a persona for Seomoz:

    Marketing DirectorGary Feldman

    A He is a 54-year old Interactive Marketing Director and co-founder of BENG Financial group. His office is located in the heart of New York’s Rockefeller plaza. He owns a nice apartment in Manhattan, but keeps his family out in the suburbs in order to avoid the bustle of city life. He is married to his wife Sheila Goldenskin of 14 years. He has two lovely twin daughters in the 7th grade.

    Gary is extremely a very competitive person. He graduated from Yale Business School in the early 70’s with an MBA and major in marketing and an emphasis on investment banking. Because of his hard work and dedication, he became the VP of marketing at Merrill Lynch and was the first to introduce Interactive Marketing to Merrill Lynch Executives.

    With his success at Merril Lynch, Gary has many resources at his fingertips. However, his situation has shifted in that he must maximize their online presence and make very careful financial decisions. Although the company’s net income is at 6,500,000 a year, Gary believes that you can never be more careful. He has researched several SEO companies that have solutions that will enhance their presence, rank them higher in search query results for specific keywords, and increase their page ranking and domain authority. Gary is willing to pay the company that will give him confidence and security. He is has a budget of 400,000 for SEO and is willing to pay the company that will deliver the best results.

    On the other hand, if I were going to look at the market segmentation of LL Bean, which is a B2C company, you would segment the target market according to individuals and not businesses as we did with the Seomoz.

    L.L.Bean may target men ages 40+, soccer moms, and young outdoorsy individuals. From there you can begin to decide what personality traits, income, lifestyle, demographics, and psycho graphics best represent the target market? Once you’ve decided, you may come up with 3 or 4 options. You then begin to mold a persona that will satisfy that specific target market.

    3M Results

    So within your target market, you have a lot of information about your clients including their socio-economic status, the ethnicity, family size, buying trends, and values. The market segmentation will help you narrow the groups that you wish to target through your website. You must consider questions such as which groups are more likely to purchase online? What motivations and concerns will these potential clients come with?

    Now, you may decide you have plenty information to begin building your site. Why would you need to delve in deeper and form personas in order to better persuade your online visitor.

    Simple: catering a site to 4 individuals with a detailed description of their loves is more successful than catering to 1 large group of people with a wide range of personalities, likes and dislikes, and opinions. My site’s structure and copy will still be very general in order to encompass the entire group. By creating personas, I am allowing my site to succeed because I can visualize who I am targeting.

    Armed with that knowledge of your market segmentations, you can create with your team of marketing and creative specialists a hypothetical individual that matches the above criteria and giving them a name, a life, a background, and a face in order to maximize your conversion and site results.

    stop CRO frustrations

    And although I’ve simplified it here the process of persona creation can take weeks of research and detailed observation before determination and creation of the final personas that you will be targeting through your site and copy.

    What face would your persona have?

Ayat Shukairy

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8 thoughts on “Personas vs. Market Segmentation”

  1. khalid khalid says:

    It seems that there is alway some debate about how much personas help in creating design and webcopy. But here is the question that I alway get asked. How long does it take to create personas for website?

  2. ayat ayat says:

    It can vary Khalid. Some clients ask for light-weight personas. IN this case the marketing research is limited, yet still reliable to come up with the most accurate personas that represent the market. If we are working on a full-implementation of the personas, this can take weeks. The first step of researching the market is an extremely in-depth process. The team collaborates for days to come up with the personas that match the target market. On average, light-weight personas can take up to 2 weeks, whereas full-implementation personas take upwards of about 4 weeks to complete.

  3. Wookah says:

    The concept of personas as a market segmentation is a good move to increase community among people around the world.

  4. Matt says:

    I think creating personas is a great idea…instead of trying to please everyone why not focus on a specific person, or couple people like the post states. Creating a persona market and target market are very important imo.

  5. Mark says:

    Can anyone suggest relevant articles/books on how to determine segmentation goals? In other words, how to I determine whether I want to segment for acquisition, conversion or retention?

  6. keith says:

    If you have a detailed segmentation model (with a formula) is the purpose of a personna just to “put a face with the data” to help the creative people come up with messaging that matches the segment description as accurately as possible?

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