Breaking Down the STP Framework
According to the Small Business Administration, only half of all businesses survive for more than five years. That statistic sounds jarring. If we talked to half of the companies that didn’t pass the five-year mark, here’s what we’d ask:
Did you understand your customer’s needs?
Were your products and services aligned with those needs?
Were you using the best channels to reach your ideal audience?
If even one of those answers is no, it could likely have been avoided with a simple approach – Customer Segmentation. Customer segmentation points out ideal customers looking to buy what you’re selling.
Customer segmentation strategies can look vastly different for any business. One of the most popular approaches is Segmentation, Targeting, and Positioning, otherwise known as the STP framework. This three-step approach examines a company’s products and services and deciphers who benefit from what they have to offer.
The goal is to segment your market, target those groups with tailored marketing campaigns and adjust accordingly.
So let’s break down these three elements.
Segmentation
Segmentation is the practice of dividing your market into distinct groups of customers. The goal here is to identify different segments based on selected criteria. These main types of audience segmentation include geographic segmentation, demographic segmentation, behavioral segmentation, and psychographic segmentation.
Targeting
Targeting refers to the group that will be the focus of your marketing efforts. The main goal in this step of the STP model is to review the segments created to determine which will produce the best ROI. (It’s important to note that you should define what that success rate is. Does it mean highest product sales or email signups? Be specific)
There are plenty of factors you can consider when selecting this target audience. Size, profitability, and reachability are just a few.
Top Targeting Criteria Used for Delivering Personalized Experiences:
Geography/Region
Purchase History
Segmentation Model
User Profile/Preferences
Age
Current geo-location
Browsing History
Shopping Cart History
Device Type
Referral Source
Gender
Positioning
You’ve done your homework. It’s time to put your knowledge to the test! In the positioning step – it’s time to set your business apart from competitors, especially in the eyes of your identified target audience. If done right, you now have the criteria to identify your niche.
What are a few positioning factors that will help you stand out from the crowd? It’s a combination of these three:
Symbolic positioning – boost customer self-esteem
Functional positioning – solve pain points
Experiential positioning – emotional connection
The benefits of applying STP marketing to your business are hefty. For one, brand messaging becomes more personalized, which makes it more effective. Your marketing efforts become more efficient because your creating content that will resonate, therefore, convert. Moreover, your product innovation can become more refined as you continue to focus on exactly who your target audience is.
