How To Use Benefit Segmentation To Grow Your Business (2024)

Have you ever bought a product for a specific feature? Maybe you were looking for a washable rug or shoes you can walk in all day.

Someone else might purchase the same product for entirely different reasons. The washable rug might perfectly match your friend’s living room aesthetic, and the comfortable shoes might be sustainably made and appeal to your eco-conscious colleague. These varied motivations are key to a marketing approach known as benefit segmentation.

What is benefit segmentation?

Benefit segmentation divides a business’s target audience based on the specific benefits customers seek from a product or service. Instead of using demographics, geography, or behavior, the marketing strategy focuses on the different values, needs, or desired outcomes that motivate consumers’ purchasing decisions. By addressing the particular benefits that matter most to each group, benefit segmentation helps you brand connect with various target audiences.

How it works

Benefit segmentation involves first identifying customer groups that value specific product attributes. With customer data in hand, you tailor your marketing materials and messaging to pitch different value propositions that align with each customer segment’s needs and desires.

For example, Taza Chocolate’s customers might enjoy different features of the same product. Some might appreciate the brand’s transparent and ethical partnership with its cacao producers; others might love that the chocolate is 100% vegan. Others may purchase from Taza purely for the taste. Taza could employ benefit segmentation to reach each of these market segments with highly targeted advertising.

Here are the main benefits of successfully employing a benefit segmentation strategy:

More compelling marketing campaigns

Your business can create more compelling marketing campaigns by focusing on the perceived benefits that resonate with potential customers. By identifying what specific groups seek—like quality, price, or convenience—you can tailor your messaging to highlight these advantages. This targeted approach lets you market products to align with the unique desires of different segments, ensuring customers recognize the value relevant to their needs.

For example, a clothing company selling jackets might appeal to quality-focused customers by highlighting materials or sharing reviews that attest to the outerwear’s performance and durability. On the other hand, price-conscious buyers may respond better to sales or a cost-per-wear analysis.

More effective product development

Benefit segmentation provides valuable insights for product development. By understanding the desired benefits various groups prioritize—like functionality, aesthetics, or sustainability—you can tailor your product features to align with these expectations. This can lead to more successful product launches and innovations tailored to specific market demands.

For instance, if a significant customer base segment values sustainability, prioritize eco-friendly materials and packaging. If functionality is a key benefit for another group, improve ease of use and add features to your product.

More competitive differentiation

Benefits segmentation can help businesses differentiate themselves from competitors by specializing in specific areas—like style or sustainability—that their target segments prioritize. This is especially advantageous in competitive markets, like the fashion industry where smart brand positioning can help your business establish a unique, recognizable identity that resonates with potential customers.

For example, if your target audience values trendsetting styles, aim to create unique and distinct pieces. You might collaborate with emerging designers, artists, or influencers whose aesthetics and values match those of your customers.

How to use benefit segmentation for your business

Conduct market research to understand key benefits
Define customer segments based on perceived value
Develop targeted marketing strategies
Evaluate and refine your approach

Looking to use benefit segmentation to improve your business’s marketing strategy? Here’s a step-by-step guide to get you started:

1. Conduct market research to understand key benefits

Start by identifying the specific features and benefits that compel your target market to buy your products. Conduct this market research by surveying your customer base, analyzing purchase data, and tracking feedback on social media and in reviews.

2. Define customer segments based on perceived value

Create segments of customers based on the benefits they value most based on your research. For example, your cosmetic business might have different customer segments for shoppers who prioritize the hydrating properties of your skin care products, while another focuses on those who value your natural or organic ingredients.

Develop detailed profiles for each segment, describing the unique benefits they pursue and why these are important to them.

3. Develop targeted marketing strategies

To develop highly targetedmarketing strategies for different segments, create unique advertising campaigns for each group’s specific desires. Marketing automation tools can then help make sure those tailored campaigns get in front of the right people.

For instance, you can target customers who are particularly price-conscious with promotions or highlight your affordability compared to competitors offering similar products at higher price points. Meanwhile, you might run separate influencer campaigns featuring celebrities using your product to attract customers who view a trendy item as a status symbol.

4. Evaluate and refine your approach

Monitor your campaign performance to identify the most responsive and profitable benefit segments. Note the language and imagery that resonate most and replicate those tactics.

If some segments are underperforming, identify the pain points. Can you improve your messaging to capture this group’s attention? Or do you need to adjust your offerings to meet their expectations? You can also use this data to inform product development.

An example of benefit segmentation

Activewear brands like Outdoor Voices and Alo Yoga are great candidates for benefit segmentation. Different parts of their customer base shop for activewear for different reasons. Here are a few benefit segmentation examples these brands might consider:

Comfort and casual wear seekers

Comfort and casual wear seekers represent an important customer segment for activewear companies. These consumers aren’t necessarily looking to break a sweat in their clothing, at least not exclusively. Instead, they prioritize comfort and a relaxed fit for everyday wear. Ads targeting this audience might highlight the versatility of the brand’s products, showing that its clothing is cozy enough for lounging on the couch, running errands, and working out.

Fashion-forward shoppers

Fashion-forward customers might seek trendy activewear as a status symbol and value unique styles and designs. To target them, brands can run trends-oriented social media campaigns showcasing their latest collections, influencer partnerships, and style guides.

Fitness enthusiasts

Perhaps most obviously, activewear brands must target fitness enthusiasts. These consumers typically prioritize performance. Within this customer segment, you might also identify subcategories of athletes who practice different sports.

For instance, runners might be looking for moisture-wicking properties, yogis need clothes that allow a full range of motion, and hikers might seek durable pieces to withstand outdoor elements. To reach these different audiences, highlight the activewear’s performance features for these various activities.

Benefit segmentation FAQ

What are examples of benefit segmentation?

One example of benefit segmentation is activewear companies that must target casual wearers who want to lounge in their apparel, as well as athletes who enjoy the practical benefits of high-performing gear. Another example is a chocolate company that attracts both vegan shoppers and those who appreciate the brand’s ethical sourcing methods.

What is the benefit segmentation framework?

The benefit segmentation framework is a marketing strategy that identifies and categorizes different customers based on the different benefits they value when shopping for a particular product. This framework allows businesses to get a better understanding of their customers’ motivations and design targeted marketing campaigns around them.

What is needs-based or benefits-based segmentation?

Needs-based, or benefits-based, segmentation is a market segmentation strategy that categorizes customers based on the specific needs or benefits consumers seek from a product or service.