We get asked on a fairly regular basis what’s the best way to identify market segments.

Very often, we’ve heard other marketers give one- or two-word answers to this question. Some say demographics, or if you’re more on the B2B-side of things, corpographics. Others say heavy users or “needs.”

As you might expect, we tend to have a longer answer.

We usually suggest considering hundreds of different ways to segment the market using all possible market drivers from category involvement and product preference motivators, to media habits and psychographics and more.

A market segmentation effort, after all, should make it clear which group or groups hold the highest economic value for your brand. By testing all of the potential ways of segmenting a market against rigorous, profit-related criteria, you can create distinct proprietary segments—segments competitors do not know exist—and then rank them by current and estimated profitability.

Aside from spending and market potential, what are some other profit-related criteria we find useful to evaluating different groups?

Here are 10 examples:

Decision-making power
The more responsibility the target has for making a buying decision, the more valuable the target.

Personal influence
The greater the level of influence a buyer has among their family, friends, and acquaintances, the more valuable the target.

Social media engagement
The more active and engaged a target is with different social media, the more valuable the target.

Responsiveness
The more a target responds to a company’s marketing efforts, the more valuable the target.

Problem potential
The bigger the problem the target has that you can solve with products and services, the more valuable the target.

Retention potential
The more likely it is that a target can be economically sustained and, therefore, retained over time, the more valuable the target.

Advocacy Power
The more likely a target is to actively try to sway members of their social network to consider and buy your brand, the more valuable the target.

Media Exposure Patterns And Media Costs
The easier and less expensive it is to reach a target in media, the more valuable the target.

Findability
The more easily a target can be identified in databases, the more valuable the target.

Channel behavior and channel margins
The more a target purchases a product/service through the highest margin channel, the more valuable the target.

For more profit-related criteria, watch Kevin Clancy’s recent webcast “Digital Insights That Drive Strategy.”

Cartoon illustration by C. Madden.