How to Use Market Segmentation for Effective Real Estate Marketing

How to Use Market Segmentation for Effective Real Estate Marketing

At the real estate marketplace, many buyers shop for different property types. Every buyer has unique property needs, and they will each respond to the message that best speaks to those needs. Or at least comes closest to what they have in mind.

The universal real estate marketing message aimed at everyone will struggle to work effectively. That’s where market segmentation can help you market your real estate better.

What is market segmentation in the real estate marketplace?

Think of dividing the many potential buyers of your property into different groups, each group with different tastes and preferences. These groups are called segments, and the process of dividing your customers into these groups is called segmentation. Market segmentation is one of the smartest moves in real estate marketing.

Real estate marketing works best when you embrace segmentation. Of course, the same property may not appeal to everyone, at least not at the same level. For example, some buyers love that sky-high penthouse, while others love that spacious house with a big compound, a lawn, and flowers. Further, some buyers will see a property as a relaxing haven, while others see it as a fast investment vehicle. Same market, different views.

It means one broad message won’t get to everyone with a unique view of your property. Up steps market segmentation. 

How deeply should you segment your market? 

How many variables should you consider before you segment your target market? No wrong answer, but you want to have a few rules of thumb at your fingertips (pun intended).

Here goes:


A message targeting a buyer in their forties may differ from what you’ll sell a buyer in their late 50s or early 60s. And also, hardly will the same kind of property appeal equally to buyers in their 30s and those in their 60s or 70s. 

Even if you have that special piece of real estate that does, the message must be different for maximum effect. When you segment your market by age, you can better tailor your marketing message.

Readiness to buy

Buyers of your property will always be at different stages of the buying process. Some may have dug around and found what suits them fine. They may even have contacted you and are ready to buy in the next 30-90 days.

Other buyers may only now be considering buying a property. They’re not ready to buy in the next six months. But it helps to be on their list of potential sellers. 

Should they move to the next level on the buyer cycle, you want to be a name they remember, even call.

Looking at these two distinct segments, you can’t have the same marketing message going out to them. It won’t work the same way.

Family size

When you’re targeting a larger family size, your message has to differ from what you’ll say to a smaller family size. The right message to the wrong segment gives the impression you’re not for them. And you don’t want that happening to you because you failed to segment your market well.

Social status

Different strokes for different folks. You can’t have a budget-focused message for high-net-worth individuals. You could, but it doesn’t sit too well.  For buyers in this segment, you want your marketing message to selling prestige, power, and status.

Conversely, the middle-income buyer may not be ready to shop for a property that promises to enhance their class and make them luxuriate in luxury. They prefer comfort, peace of mind, and practical functionality.

You don’t want to mix these messages, as neither segment will receive them well enough. That’s what segmenting by social status helps you do – or avoid.

Property need

Everyone won’t buy your property to raise a new family in. Some would love to have it as a second home, others for investment. For this segment, you can’t sell them on enjoying every minute of their time in your beautiful property. It just won’t wash.

Conversely, you can’t harp on too much about the investment potential of a property to a buyer who needs a permanent home for their family. These differences may not seem like much, but where another message gets your buyer’s desires right, you bet they’re jumping on that wagon. That’s what segmenting by property need helps you avoid.

Don’t go too broad or too narrow with your segmenting

You can’t overdo segmenting by going too narrow or too broad. The variables we covered in the previous paragraph are broad but specific enough to help you segment your market better. But there’s more to it than these few variables. 

As you study your buyer better, you’ll find other variables that could help you segment your market. While at it, ensure you don’t go too narrow with your segments.. As we’ll see later, some segments are too narrow they hold little promise of profitability. It’ll cost too much to find, let alone acquire, customers in these segments. You want to market smarter!

After the variables consider other aspects like:

Segment attractiveness

So you found you’d love to target the 30-somethings segment. But is that market attractive enough for your million-dollar properties? Probably not.

Segment profitability

Similar to segment attractiveness, 30-somethings would love your penthouse units. But how many of even the most ambitious 30-somethings can afford it to make your project profitable? Not an awful lot.

Segment needs

Not all segments will need your property. Back to our 30-somethings, most don’t need a four/five-bedroom detached house. If that’s what you’re selling, targeting too many marketing efforts and dollars at them is unprofitable. 

Conversely, you bet for that stage in life, they’ll love your studio, one or two-bedroom apartment units more.

You can segment your market by many variables. But pick the most relevant ones that’ll help you make the most of your real estate marketing.

You want to harness the power of segmenting your market

You can have multiple segments for the same property. So long as you speak to that segment, you’re on track. You don’t want the general message targeting everyone – or no one. If someone targets your customers with a clear, more relatable marketing message, you’ll lose out to them.

But if you can break your target market into separate segments and get the best message for each, you’ll give yourself a shot at winning. That’s smarter marketing. Go make it happen.

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