Segmenting Your Target Market: A Top Down Approach

If you haven’t worked with many clients, you should choose your target market by narrowing down your focus from the overarching market of “home buyers” or “home sellers”. This method breaks those categories into smaller, more manageable subgroups. Here are some ways to segment your market.

Demographics - Where do they live? How much do they make? How old are they? Their gender? Their ethnicity? Their education?

Geography - Where do they live? Why do they live there? What type of lifestyle do they have in their geographical area?

Lifestyle - What do they do for a living? What motivates them? What types of interests and hobbies do they have? What type of car do they drive? Where do they go on holidays or vacations?

Life Cycle - Where are they in their life cycle? Are they single, just married, expecting their first child, divorcees, empty nesters, retirees?

Motives - What motivates them to buy? Are they emotional or rational buyers? What do they care about - the economy, investing, security, stability, the American dream?

Lifetime Value - Are they a one time buyer or are they likely to need your services on an ongoing basis? How much will it cost to acquire them?

Some common areas real estate agents focus on include:

• Boomers
• Empty nesters
• Ethnic/Minority buyers
• Expireds
• First time buyers
• For sale by owners
• Generation Y
• Luxury home buyers
• Relocation buyers
• Second/Vacation home buyers
• Single women
• Specific neighborhoods in your area

Which should you choose?
Pick people you are comfortable working with. If you’re a Boomer and aren’t up-to-date on the latest technology, you’ll probably have a tough time reaching Generation Y and younger, more internet savvy prospects. If you’re Hispanic, are familiar with the culture and speak Spanish, perhaps you’d consider targeting this up and coming market. If you were a single woman home buyer, perhaps you can help other women trying to do the same.

Think back through past jobs, internships, work studies, etc - what knowledge of these types of people can you bring from your previous experience? What are your spouse’s and family members’ careers - can you target people like them? What neighborhoods do you know best - would those be good targets?

Go with the people you know best.