How Inventors Build Successful Businesses: Customer Segments

You know when you meet someone for the first time, and you’re pleasantly surprised to find out that both of you share a mutual friend? When you start talking about that mutual friend, there’s a specific way you define your relationship with them. Whether you do it intentionally or subconsciously, you’ll classify them as a “close friend” or a “work friend.”

We do this because we obviously treat our closest friends differently from our work friends. In other words, our relationships from one group of friends to another are going to be different. That’s because the level of trust and shared interests differs in each group. In business, we do the exact same thing to build specific types of relationships with different groups of customers.

In this article, we’ll be talking about customer segments for invention makers.

Customer Segments

Customer Segments are one of the nine components of the Business Model Canvas that helps inventors manage and structure a streamlined business plan. The importance of having customers is cut and dry – you need customers to be profitable and run a successful business. But no two customers are the same, just like how no two friends are the same. Consider all the great things your brand or product offers. You’ll realize that your customers value different aspects of your business. Similarly, you’ll also notice they often use different channels, such as email or social media, to interact with your business.

So, customer segments for invention makers mean grouping customers who share common characteristics. The purpose of creating customer segments is to create tailored marketing strategies for each group to achieve your business objectives. The most successful businesses communicate salient messages that resonate with their different customer segments based on their values and the channels they use.

As you start creating your segments, you’ll learn which segments to ignore and which to focus on. By doing so, you’ll want to build trust with new customers while establishing stronger relationships with your most profitable customers. Whether it’s pricing, customer service, or your online checkout sequence, use your knowledge about your customers to upgrade your overall customer user experience.

How to Build Customer Segments

When invention makers start building customer segments, they’ll start by researching market trends and categories. When you start selling your product, be sure to track and organize valuable data from online marketing campaigns and purchases to start analyzing patterns as well. You can get information such as age groups, genders, purchase history, and location to incorporate into your customer segments. 

Each customer segment should clearly state the following:

• The specific value your product business provides to this customer segment.
• Alternative products that are available to the customer segment.
• The rank or priority in relation to your other customer segments.

As an inventor, small manufacturer, or startup, chances are you’ll be focusing on a niche market segment. Firstly, your starting point is to divide customers into two segments: B2C (business-to-consumer) customers and B2B (business-to-business) customers.

Your next step is to further divide these into segments based on demographics, values, behaviours, psychographics, interests, and needs. Each segment should represent a general type of customer. Using Apple as an example, here are some examples of segments below to help you get started. 

The Diehard iPhone Fan

• Priority: High
• Description: This customer eagerly looks forward to the next iPhone model and will be one of the first to pre-order. Either loyal to Apple or long to be a part of the Apple ecosystem. Often vocal about the benefits of Apple products as well
• Gender: Male or Female
• Age: 16-40
• Values: Expect a beautifully designed product. Not overly concerned about features. They seek a sense of belonging and believe that purchasing Apple products will raise their social status. 
• Personality: Creative, determined, and ambitious.
• Existing Alternatives: Older iPhone models, Samsung Galaxy and Google Pixel.
• Value Provided: Trade-in program and newness.

The Casual Smartphone Buyer

• Priority: Low
• Description: This customer switches to whatever phone they feel comfortable with when their contract is up or when they feel like upgrading.
• Gender: Male or Female
• Age: 18-45
• Values: Price, features, and services.
• Personality: Varies
• Existing Alternatives: Samsung Galaxy and Google Pixel.
• Value Provided: Trade-in program, free Apple Music, TV, etc. service trials, competitive price point with the iPhone SE and other older iPhone models.

Conclusion

At the end of this process, you should have a list of customer segments that encapsulate your target customers in general. Each segment should be listed by priority and clearly state the value that your product business provides.

About: MAKO Design + Invent is the original firm providing world-class consumer product development services tailored to startups, small manufacturers, and inventors. Simply put, we are the leading one-stop-shop for developing your physical product from idea to store shelves, all in a high-quality, cost-effective, and timely manner. We operate as one powerhouse 30-person product design team spread across 4 offices to serve you (Austin, Miami, San Francisco, & Toronto). We have full-stack in-house industrial design, mechanical engineering, electrical engineering, patent referral, prototyping, and manufacturing services. To assist our startup and inventor clients, in addition to above, we help with business strategy, product strategy, marketing, and sales/distribution for all consumer product categories. Also, our founder Kevin Mako hosts The Product Startup Podcast, the industry's leading hardware podcast. Check it out for tips, interviews, and best practices for hardware startups, inventors, and product developers. Click HERE to learn more about MAKO Design + Invent!