Customer Segmentation

Customer segmentation—all businesses can do it regardless of their industry, size, or what they sell. So what exactly is customer segmentation?

Basically, it’s a way of sectioning customers into groups that have something in common. Your company can then tailor its marketing and sales campaigns to meet the demands of your different customer segments. You’re far more likely to get a more significant ROI on your marketing efforts when you do this.

Examples of things entrepreneurs can monitor to help categorize their shoppers include:

• Which customers shop the most with you
• Which customers are more likely to purchase when you host a sale
• Which consumers prefer your latest and greatest products

Then there are other more general demographics to consider, like:

• Their location (city/country/suburbs)
• Gender
• Age

Once you know your customers are, you can target them with more specific marketing. Simple, right?

If your business sells or provides services or products to other companies, you might consider the following groups for your customer segmentation:

• What products they’ve previously bought from you
• What industry they’re in
• Their location
• The number of employees they have

Why You Need Customer Segmentation

You may be thinking, why do I need to bother doing this? I’ve got a great product, shouldn’t that be enough on its own?

The short answer? No.

By splitting your customers into groups, you can craft your marketing content and messaging to appeal to different audiences. No two people are the same, and segmenting your audience allows you actually to take that into account!

Also, one group of people may prefer receiving marketing through Instant Messenger or SMS. Another may find this intrusive and annoying. Some people only respond to emails or TV and radio ads and block out everything else. Knowing this about your customers will help you sell, boost your profits, retain your customers, and plan your business strategy.

Through segmentation, you’ll get to know your customers better, find out which ones spend more money with you and when, and this will, in turn, will help you to upsell other products and services. You’ll also get a better feel for which prices work with your customers and which ones consumers shy away from.

In a nutshell, customer segmentation is another way of analyzing and managing customer data and research, whether or not you sell online or in person. It will make your business more productive and help it grow.