Segment for sustainability
Segmentation allows you to group together customers with similar characteristics or requirements, so that you can develop a targeted and focus approach. Chris Ashworth explains how to use this approach to promote sustainability.
Segmentation is a core principal in marketing, it’s the process of defining your markets and allows the business to accurately measure its share of the market, how it is changing, as well as identifying target customers and influencers. In the construction industry we tend to use the segments defined by government statistics; Public and Private Residential, Public Non-residential, Private Industrial, Private Commercial and Infrastructure. These are not always right for today’s markets and forecasting organisations like the CPA, split the market further with segments, including Health, Education, Offices and Retail.
These are nice functional segments, with individual characteristics which allow us to focus expertise and tailor offerings. But as sustainability becomes a core issue, there is the opportunity to subdivide these sectors into niche segments to reflect attitudes to, and potential for, sustainable products and services.
Some sectors seem easy to categories; Public Residential must be built to Level 3 of the Code for Sustainable Homes. But within that some RSLs just build to Level 3, while others are looking to achieve Level 4 or above. These two groups will have different requirements. By identifying those building to Level 4 and above you have a group of customers looking for a superior product or service offering.
Similarly, within the retail sector some clients will be building to the minimum requirements of the Building Regulations, while others like Marks & Spencer, are working towards zero carbon construction of stores. Two different opportunities within the same segment.
So, although traditional construction segmentation gives us clear information about market sizes and trends it may not help us to target key opportunities. Segmentation needs to be taken to a further level. Fortunately this is not too difficult; it just requires a little work. Clients who are voluntarily adopting a sustainable approach are also actively promoting this fact. So it’s easy enough to draw up a list of sustainable retailers. There is also plenty of information available concerning existing stores and plans for new developments allowing the size of the segment to be accurately calculated. Using one of the project lead services will also allow you to identify the key decision makers for store design and refurbishment. From there it is a matter of developing a focused marketing and sales strategy to promote your sustainable offering.
Where there is greatest need for segmentation is possibly in the upgrade of existing homes. As the programme to upgrade our existing housing stock moves forward there is a massive opportunity to sell to home owners. But this massive customer group needs to be segmented into many categories and promotion developed to suit. The message to a pensioner is going to have to be very different to that for a young family. And each group will also have different influences such as the age of their home and their income levels. In its recent report The Commercial Value of Sustainability (http://www.cimcig.org/library.php?id=163) CIMCIG identified that it is not just legislation, but marketing which will be needed if the construction industry is to get maximum benefit from this opportunity. The only way construction can succeed is to segment the market, identify the most attractive sectors and adopt a targeted market approach.
As sustainable construction becomes more widely adopted throughout the industry these niche segments will expand until they represent the whole industry. By then you will have developed techniques and gained experience which will allow you to promote your sustainable offering effectively to a much wider audience. So start segmenting!
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Chris Ashworth is Managing Director of Competitive Advantage a consultancy providing strategic support, training and research to the construction industry. He is also
a committee member of CIMCIG, the CharteredInstitute of Marketing’s construction industry group.
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