The Benefit of Perfecting Market Segmentation is Happiness


Posted by Denise Powers
Denise Powers

Topics: marketing


Portrait of a woman with her beautiful dog lying outdoors

They say there is someone for everyone.

The same goes for B2B and other services-based businesses too.

As an entrepreneur or business leader, you may not realise it during those sleepless nights worrying about driving revenue so you can make payroll at the end of the month, but you can and should select your clients. Having the perfect-fit clients can mean the difference between getting great satisfaction from your work and driving yourself to hell and back every day.

I have done the latter, but now older and wiser, these days I highly prefer the former. It is more profitable too. Let’s go through why that is.

What is Market Segmentation?

Market segmentation is a process of dividing clients into groups based on specific characteristics, such as behaviours, needs and service offerings. It is essentially a business decision made on two levels:

  • At the company service level where you decide which specific services you are exceptional at, making the commitment to not take on projects you know could perform at a ‘just okay’ level; and
  • At the client level, where you decide which types of clients you are best suited to serve – the ones you ‘click with’.

It is no fun trying to be everything to everyone. Just ask the harried professional working mom who is up at midnight, making homemade cookies for her kid’s school bake sale. Sometimes, you must make decisions to not do something and sometimes those decisions can be painful. But once made, they are liberating.

The Benefits of Target Market Segmentation

What are the advantages of market segmentation?

The big answer is, if your company has nailed market segmentation, you will be doing the work you love, for people you love. And what could make one happier than that?

But a big answer has several component parts.

Market segmentation gives your company focus through client-centricity, increases profitability, provides competitive advantage, improves your service quality and enables business growth.

Are you feeling happy yet?

1. Client-Centric Focus

Historically, market segmentation has been done by demographics. But, because we are also consumers with expectations of being treated as individuals, we know that classifying people into age-groups and postal codes is no longer enough.

What we need is psychographic segmentation, identifying groups based on specific personality traits, values, attitudes, interests and lifestyles. This is as true of B2B businesses as much as it is for B2Cs.

Create personas, or semi-fictional characterisations of your ideal clients that answer the following questions:

  • What work do they do?
  • What do they love to do?
  • What motivates them?
  • What are their biggest challenges to meeting their goals?
  • What do they aspire to?
  • What are their views?
  • How do they want to communicate?
  • What do they read and how do they access information?

Talk to your favourite clients and others like them so you aren’t guessing about the details.

When you immerse yourself in the needs and pain points of your client and get a deep understanding of how you can provide help and assistance to them as people, magic happens. Go back to your service offerings and make any tweaks that will be more helpful to your clients.

2. Profitability

Dan Tyre of Hubspot has said at least 10 times since I have known him “the riches are in the niches”. Although his accent is different than mine (it rhymes and sounds good when he says it!) the message is correct, no matter the language.

When you and your team are in the groove, doing work that you are great at, outputs are more efficient. You can hone your pricing strategies. Your authority in a specific area makes you the go-to for those people and organisations facing challenges you understand.

Communications to this group is simplified, targeting the right message to the right people in a personal and authentic way – at scale. This reduces the cost-per-acquisition of new clients and keeps delighting your existing clients.

Meanwhile, you keep more money in your pocket.

3. Competitive Advantage

Modern consumers of services don’t like generalists of anything.

Everyone wants a specialist.

So why do so many business leaders still believe in casting a wide net to see what they can catch?

From my own experience, I think the primary motivator for that is fear. FOMO (fear of missing out) and fear of being without. As a business owner, and particularly in the start-up phase, sometimes doing work that you don’t really want to do feels better than not doing any work. It is an income versus expenses thing.

I get it, but it doesn’t pay in the end.

The services that you and your team can provide at a supremely high level are the only services you should offer.

Forget the rest.

Build your authority in this area, with your favourite clients and their challenges in mind.

Be the market leader in your industry, or the specific segment of your industry. The specialist company delivers an effective value proposition that the competition cannot touch.

And it attracts the very best talent too.

4. Service Quality

Concentrating on doing the work that you are very good at, and building your expertise in that area, cannot but help improve your service delivery. Industry and delivery focus, experience, tried and tested business processes, intellectual capital – all lead to a better customer experience.

And a better customer experience means a better relationship, built on trust.

5. Growth

It might seem counter-intuitive to say that by niching-down and delivering specific services to a smaller group of clients, there are more opportunities for growth, but it is true.

If you live in a small community like we do in the Cayman Islands, it can be easy to fall into the trap of thinking that your services may only be relevant in that small market, but if they are relevant in your area, might they not be relevant in others?

Think about market expansion regionally, or even globally.

Chemistry - The Final Happiness Factor

Putting together all these positive reasons to invest the time and energy into market and audience segmentation, I am already starting to feel happier.




Count me in.

But the final reason to do this is ‘chemistry’.

You know what good chemistry is in a relationship. Things work. There is energy, and synergy. Most importantly, there are results.

No one wants to fire a client. But sometimes, it is necessary, for the health of your business and for your own health.

When you get proficient at segmentation, you will automatically attract and select those clients that you love to work with. The ones who aren’t a good fit will start to stick out like a sore thumb and if you find yourself cringing every time their number pops up on your phone, or you open their emails last, well, you know what needs to come next.

Life is short.

Do the work you love to do.

Do it well.

Do it for those people with whom you have a relationship built on mutual trust and respect.

That sounds like happiness to me.

At Fountainhead, we have the very best clients in the world. We like working with them and we will go to the moon and back for them. If you want to learn more about how to find your perfect client, drop us a note at, tweet us @fountainheadcayman or drop in for a chat and a cuppa – Bayshore Mall, George Town Grand Cayman.