What Is Needs-Based Segmentation? The Only Marketing Guide You Need

Last updated on by Iryna Marchuk in Marketing Personalization

Ever tried selling gym memberships with no flexible hours to 9-to-5 workers? Winter coats in summer? Or maybe surfboards in a landlocked city?

It just doesn’t add up, does it?

The reason why these things don’t work is precisely why you needs-based segmentation.

What is needs-based segmentation?

Needs-based segmentation divides your larger audience pool into more manageable groups based on shared characteristics or behaviors. So, instead of casting a wide net and hoping for the best, you can tailor your messaging, products, and services to meet the specific needs of each group.

This means more relevant offers, better customer experiences, and, ultimately, stronger relationships that lead to more conversions.

Instead of focusing on broad categories like age or gender, needs-based segmentation zeroes in on what truly drives a customer to seek out a product or service. By understanding the “why” behind your customers’ choices. Needs-based segmentation divides your audience into distinct groups based on their specific needs, preferences, or problems they want to solve.

Needs-based segmentation vs. other types of segmentation

While need-based segmentation might seem similar to other types of customer segmentation, it’s actually quite different:

Demographic vs. need-based segmentation

While useful for general targeting by grouping people based on age, gender, income etc. demographic segmentation doesn’t reveal what motivates a purchase. For instance, two individuals in the same age group and income could have entirely different needs when buying a car—one might prioritize fuel efficiency, while the other wants luxury features.

Psychographic segmentation vs. needs-based segmentation

Psychographic segmentation focuses on psychological factors that impact buying decisions, such as personality, values, beliefs, lifestyle, attitudes, interests, activities, social class, etc. While this approach provides deeper insights than demographics, it may still lack actionable data on specific needs, which is a core component of need-based segmentation.

Behavioral segmentation vs. needs-based segmentation

Psychographic segmentation categorizes customers based on their behavioral patterns when interacting with a brand, such as purchase history, loyalty, response to a product, service, etc. Although it provides clues about past behavior, it doesn’t always explain the underlying need driving that behavior.

Needs-based segmentation cuts across these categories, focusing directly on the problems and desires that lead customers to engage with your brand. It creates a more precise connection between what you offer and what your customers truly want.

Segmentation Type Focus Benefit Limitation
Needs-Based Customer desires Highly relevant to solving problems Requires in-depth research
Demographic Personal traits Simple and widely applicable May overlook individual differences
Geographic Location Useful for location-specific offerings Ignore customer motivations
Psychographic Lifestyle/values Deep emotional connection Hard to measure
Behavioral Action and habits Data driven actionable May miss underline motivations

A great example of needs-based segmentation is Target’s sensory-friendly clothing line, introduced in 2017 under the Cat & Jack brand.

Cat & Jack adaptive apparel was designed to meet the needs of children with sensory disabilities. The collection featured flat seams, tagless designs, and soft fabrics, all to make getting dressed easier for the kids and–kids and parents. With this campaign, Target focused on an often-overlooked consumer base to better serve their needs in a meaningful and practical way.

What are the benefits of needs-based segmentation—why you need the segmentation type

  1. Better customer relationships

    When you know what your customers truly need, you can tailor your products and services to fit their needs perfectly. This builds trust and loyalty, making them more likely to stick with you.

  2. Improved product development

    Understanding your customers’ needs helps you create products that actually solve their problems. For example, Jao skincare brand created a product titled Jao Refresher, listed as a hand sanitizer, but also suitable as an aftershave and facial astringent.

  3. Increased market efficiency

    Instead of throwing money at broad marketing campaigns, you can focus on the people who are most likely to buy and get the most out of your marketing budget.

  4. Stronger competitive positioning

    You’ll stand out from the crowd when you deliver exactly what your customers want. Competitors who rely on more general segmentation methods will have a hard time keeping up.

How to apply needs-based segmentation in your marketing campaigns?

To apply needs-based segmentation to your marketing funnels, you should develop a systematic approach to understanding and addressing the specific needs of different customer groups. Here’s how businesses can effectively implement this strategy:

  1. Collect data

    Use surveys, customer feedback forms, and website analytics to learn about the pain points, preferences, and challenges your audience faces. Customer support interactions, social media listening, and reviews can offer valuable insights into what your customers need.

  2. Analyze the data

    Once all the data comes in, look for recurring themes in the feedback—common problems, preferences, or suggestions to improve your product or service. For example, an e-commerce business might discover that a segment of its audience values fast shipping over discounted prices. Segment your audience based on these insights to create groups that have shared needs.

  3. Create a сohesive strategy

    After you’ve identified your audience segments, you need to tailor your messaging, products and offers to address the pain points of each customer group. Craft clear and compelling value propositions for each group to ensure your messaging resonates.

  4. Implement your strategy

    The next step is rolling out your needs-specific campaigns across different channels, such as email, social media, and paid ads. Use personalized content to address the unique requirements of each audience segment.

  5. Combine needs-based segmentation with other segmentation methods

    Combining needs-based segmentation with demographic, behavioral, or psychographic segmentation can further refine your approach. For instance, you could use demographic segmentation to identify age-specific needs or behavioral data to target frequent buyers with tailored rewards programs. This will ensure high relevancy and personalization of your marketing campaigns.

How does needs-based segmentation work in B2B marketing

Needs-based segmentation in B2B marketing focuses on the unique challenges and priorities of business customers rather than individuals. This allows B2B marketers to craft campaigns and solutions that resonate deeply with their target audience and reap the benefits in the form of:

  1. Increased relevance

    By focusing on specific needs, marketers and advertisers can craft highly relevant messaging statements that speak directly to their target segments’ pain points and goals. This approach results in higher engagement and conversion rates for B2B marketing campaigns.

  2. Enhanced customer loyalty

    Understanding and addressing the unique challenges of different target business segments promotes stronger relationships. When customers feel understood and valued, they are more likely to remain loyal, resulting in long-term partnerships and repeat deals.

  3. Improved product development

    Insights gained from needs-based segmentation can inform and impact your product development strategy. By aligning new offerings with actual customer needs, B2B marketers ensure their products remain relevant and valuable, strengthening their competitive edge.

Here’s the step-by-step process of initiating and implementing needs-based segmentation in your B2B funnels:

Identifying customer needs

Segmenting the market

Developing tailored marketing strategies

Implementation and monitoring

    For example:

  1. Host webinars for businesses seeking education about your product’s benefits.
  2. Share case studies with companies that value proof of effectiveness.

The four most common needs-based segments

When it comes to needs-based segmentation, understanding the core motivations of your audience will help you align your marketing efforts with their priorities. Let’s break down the four most common needs-based customer segments and talk about how you can tailor your marketing approach to each one of them:

1. Productivity-focused segment

The productivity-focused segment comprises businesses and individuals that prioritize efficiency, time savings, and seamless workflows. These customers typically seek tools and solutions to help them accomplish tasks faster, reduce manual effort, or streamline their operations—for instance, automation tools or cross-platform solutions.

Recommended marketing approach:

For example, Slack’s “The Big Meeting” ad uses a vibrant musical format to showcase how its platform empowers productivity-focused teams.

As a sales team scrambles for a rescheduled meeting, Slack’s tools help them seamlessly organize and execute tasks, contrasting chaos with efficiency. The ad cleverly highlights how Slack streamlines collaboration, making work smoother and more productive.

2. Cost-conscious segment

The cost-conscious customer segment includes small businesses, startups, or budget-sensitive customers who prioritize affordability and seek the best value for their money. These customers carefully weigh costs against perceived benefits and are drawn to discounts, promotions, or flexible pricing models.

Recommended marketing approach:

For example, Eyebuydirect’s ad campaign focuses on the affordability of its eyewear and the convenience of purchasing it online. Their tagline literally says, “Quality-made eyewear at prices to love.”

The “Pulp & Press” juice company offers tiered pricing for their Seasonal Complete Cleanse juice packet designed for customers seeking to support their metabolism and immunity during the colder months.

The page also offers an additional 30% discount on a supplementary Pumpkin Spice 6-pack when the juice packet is purchased.

3. Quality-oriented segment

The quality-oriented segment includes enterprise clients or consumers in high-end markets. Customers in this segment typically have bigger budgets, value premium offerings, and are willing to pay more for superior quality. These customers seek products or services with durability, reliability, and exceptional performance, reflecting their commitment to excellence.

Recommended marketing approach:

For example, the BMW 2023 “i Vision Dee” campaign focused on cutting-edge technology like AR, “electric ink”, and more used in its new fully electric concept vehicle. In its messaging statement, the brand referred to it as “empathetic technology and future-forward design” and featured actors Arnold Schwarzenegger and David Hasselhoff in a promotional video.

4. Innovation-seeking segment

The innovation-seeking segment customers are early adopters or tech-savvy professionals willing to experiment and invest in products that keep them ahead of the curve. They seek cutting-edge solutions, new ideas, unique features, and groundbreaking technologies.

Recommended marketing approach:

For example, OpenAI has released videos introducing its models, such as the “Say Hello to GPT-4o” video, which provides insights into their capabilities. These promotional efforts aim to inform and engage audiences about OpenAI’s latest developments in artificial intelligence:

Notably, in December 2024, OpenAI launched the “12 Days of OpenAI” campaign, unveiling a series of features and products, including the o1 Model and ChatGPT Pro Subscription.

Needs-based segmentation examples

1. Needs-based segmentation examples

IKEA’s ‘The Big Night In’ campaign focuses on helping people get better sleep. It showcases a variety of products, like mattresses and bedroom furniture, designed to improve sleep quality. The campaign aims to meet the need for comfortable and supportive sleep solutions.

2. Fenty Beauty Pro Filt’r Foundation

Rihanna’s Fenty Beauty collection addressed the need for inclusive makeup by offering a wide range of foundation shades (over 50) for all skin tones, focusing on darker shades. This campaign filled a gap in the market, making beauty products more accessible and ensuring everyone felt represented.

3. Rolex

The Rolex commercial targets people with big budgets and aspiring buyers who value luxury, exclusivity, and the brand’s timeless craftsmanship. It appeals to the needs of professionals, watch collectors, and those seeking a symbol of success and achievement, positioning Rolex as more than just a watch but a legacy and a status symbol.

4. Capital One Bank Concierge Services

Capital One’s Luxury Concierge Services cater to affluent customers seeking personalized, exclusive experiences. This service provides access to high-end travel, dining, events, and unique experiences, all tailored to wealthy individuals’ convenience and lifestyle needs . It aligns with the luxury consumer’s desire for convenience, exclusivity, and VIP treatment, offering 24/7 personalized assistance to meet their needs.

The role of needs-based segmentation in marketing

Marketing can feel like a guessing game without truly understanding what your customers need. That’s where needs-based segmentation makes all the difference.

By focusing on what matters most to your audience—saving time, cutting costs, top-notch quality, or the latest innovations—you
can create campaigns that genuinely connect and deliver value.

This approach isn’t just about better messaging, it’s about building stronger relationships and offering solutions that truly fit. With needs-based segmentation, you’ll not only engage your customers more effectively but also see better results for your efforts.

You can use Instapage’s Personalization feature for just that purpose: to tailor your landing pages to the specific needs of different audience segments and deliver conversion-optimized experiences that resonate with every visitor.
Create multiple unique landing page experiences for different audience needs

By aligning your landing pages with needs-based segmentation, you can ensure every visitor feels understood and valued, driving higher engagement and conversions.

Ready to make your marketing more focused and effective? Try Instapage free for 14 days and start creating personalized landing pages that turn clicks into conversions!

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