Needs-based segmentation overview

Need-based segmentation is the process of grouping people based on their shared needs; instead of grouping them based on data like age or location. Once you identify a common need, you can learn more about why your customers make certain buying decisions based on that need. You can then use this information for targeted ads and personalized marketing strategies.

Grouping people together based on shared characteristics is essential for targeting the right audience and increasing conversion rates. Customer-based segmentation is often based on shared factors such as age, gender, location, behaviors, or needs.

Needs-based segmentation is becoming popular among marketers, and for a good reason. We’ve created an in-depth explanation of needs-based segmentation to show you how it can help you connect precisely with your audiences and inform your marketing strategy.

Why should you consider needs-based segmentation for your marketing strategy? It can increase customer loyalty, create targeted marketing opportunities, and improve product development.

Needs-based segmentation gives you a more in-depth understanding of customer needs so you can build a personalized customer journey with more relatable messaging and tone. Customers are more likely to choose and remain loyal to brands that value their needs.

Needs-based segmentation lets you target specific segments that you can’t find with data-based segmentation alone. You’re guaranteed higher conversion rates when you can target specific segments.

When you know the needs of your customers in the market, you can create better products to meet their needs. This can lead to growth opportunities and higher conversions.

A customer-based segmentation strategy divides your customer base into groups based on shared characteristics. When you combine needs-based segmentation with other segmentation strategies, such as behavioral segmentation, you can take your targeting to new levels. Knowing their needs and purchasing behavior, you can create more targeted ads and products to benefit them.

Knowing your customers’ needs can help you identify other segments, such as behavior-based. The way customers make purchasing decisions is primarily based on their needs. If you know customer needs, you can create a plan to get them to behave a certain way in the future (i.e., purchasing your product instead of buying from competitors).

Customer segments, like demographics or geographics, can determine the needs of your target audience. People in specific demographics or geographics can share similar needs. For example, young adults with small children who live in areas with a lot of snow often need a vehicle with four-wheel drive large enough to fit the whole family. When you create segments based on demographics, you can often find a common need among these customers.