Segmenting Your Target Markets Identify and target your highest value customers to maximize your marketing spend

In the solar business, we often get caught up trying to be everything to everyone. By taking some time to study your customers, you can focus on those that will produce the highest profits for your company.

Introduction to Market Segmentation

Market segmentation is a process of analyzing your target customers and grouping them based on similarities. Once you do this, you can determine the value of the average customer in each group and focus your marketing efforts on those with the highest potential for profitability.

For an extreme example in solar, you could have target customer base of homeowners with $100K+ annual income or one that is composed of college students. Of course, the former is more likely to convert to a sale today, so you should do everything you can to eliminate wasted marketing to the latter.

The most common ways to breakdown your target market segments are:

  1. Demographics - Age, income, gender, home ownership, etc.
  2. Geographics - Country, state, county, city, neighborhood, street, etc.
  3. Psychographics - Lifestyle, hobbies, interests, etc.
  4. Behavioral - Price-conscious, online shoppers, early adopters, etc.

Determining your target market segments

For residential solar (I'll focus on commercial solar segmentation in a later article), there are a couple pretty obvious characteristics of high-value customers: home ownership and middle-class or higher income. As you may know from your experience, you can sell to other customers but just those two alone make for a much easier sales process.

However, you are going to need to break your targets down much further than that. After all, on Facebook alone, there are 147 million people that meet both of those requirements. First, you need to start with the obvious one for your company, which is geographic targeting determined by your service area. For example, if you chose the San Diego area, you are already down to 1.6 million people.

The next level of segmentation involves a bit more work.

Getting to know your customer base

Now that you have checked off the obvious boxes, it is time to look at your existing website traffic and sales to determine where your company is most successful. Of course you could guess at a few characteristics of a typical solar buyer, but data beats guess when trying to maximize your marketing spend and reduce your acquisition costs.

The primary ways to take a deeper dive into your customer base are as follows (I'll focus on each separately in future articles, but I'm here to help if you need it now):

  1. Collecting Your Own Data - You should already have names, addresses, phone numbers, and emails for your sold systems. That's a great first step, however that data would be even greater if you appended it with age, marital status, income, etc. Some can be intuited from your sales staff through interactions from the customers, but a simple follow-up survey can be a great way to gather some further info. Once you have a good amount of data points, you can start to infer information on your customers using some simple analysis.
  2. Website Analytics - Google Analytics is free and extremely powerful for tracking customer segments. With some simple code added to your website, you'll start tracking high level market segmentation info, such as demographics and geography. Out-of-the-box, it is loaded with plenty of info to help you refine your target audience. Add in tracking of different actions on your website (such as completing your lead form), and you can get lost in the amount of detail you can get on your site visitors.
  3. Contact Info Analysis & Appending Tools - Related to #1, as long as you have email addresses and phone numbers, you use one of several online tools to do two things: append additional info to those contacts or produce an analytics report with all your desired segmentation info. For just a few cents per email and the power of Big Data, your simple list can become detailed profiles of your customer base.
DIY Action Item

If you don't already have Google Analytics set up, go to, create an account, get a tracking pixel and implement it on your website immediately.

The era of hyper-targeting

Once you have the data and have done the analysis, it is time to find your audience. Thankfully, with modern technology we have moved on from the days where you were forced to choose from vaguely targeted marketing options that included a lot of waste. Most online marketing options have very precise targeting functionality, dubbed hyper-targeting because it can literally target on the level of an individual person.

In fact, I can say with 100% certainty that you are being hyper-targeted right now, as the practice of retargeting (serving ads to people based on an action, such as visiting a specific website) happens all across the internet. I can hardly go an hour on the internet without seeing a solar or marketing ad.

That said, the top targeted marketing options are:

  1. Social Media - Every social media site has piles of data on every one of their members. For a reasonable cost, you can place ads in front an audience refined to your specifications. It's pretty scary as a user. It's pretty awesome as an advertiser.
  2. Retargeting & Behavioral Targeting Companies - There are a handful of companies (including the social media sites) that can place your ads in front of people that have visited your website or visit websites that are of interest to your typical audience. Load in your target information, create ads, set budgets, and you are on your way.
  3. Direct Mail - This one is an older practice, but your market segments in the hands of a direct mail company can ensure that your message reaches only the right homes. Layer on the ability to print customized messaging on a household level and you can create some extremely impactful mail pieces that stand out from the junk mail.

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