How to do Customer Segmentation for a Personalized Marketing Experience

by | Jun 8, 2020 | Digital Marketing

9 Min Read. |

There are about 65% to about 75% of so many new products that don actually get to hit the target of revenue that is expected of them? But do you know why that happens in most of the cases? Well, one of the reasons could be that the products are not really that good.

But that is not the reason. Most of the time, it is due to the fact that these companies don’t really factor in the needs and the requirements of the customers. So, they don’t really understand what their customers want and hence go for the same thing again and again.

However, not all customers are the same, right? How can the one-size-fits-all technique work in the case of customers? You cannot go around promoting cars to a generation of old people now do you? The trick here is to know what your customers would need and then divide them into groups on the basis of that.

This is exactly where customer segmentation comes forth to help you out in the best way. Here we are going to discuss that in great detail for your understanding. We are going to be touching on all the important pointers that people need to know about.

So, you will get to learn about the customer segmentation definition, the customer segmentation examples and so much more for sure. Make sure that you are reading till the end and listening to what we have to say because we can guarantee that this information is going to be really helpful for you.

What Exactly Is Customer Segmentation?

Before we go forward and see all the other details, it is really important for you to know about the customer segmentation definition in the first place for sure. You might be a bit surprised to know that customer segmentation is also called a client or consumer segmentation as well.

When it comes to the Customer segmentation definition, it is pretty simple and anyone can actually understand it. It is basically the practice that involves the division of an entire customer base and that too into smaller groups of individuals on the basis of certain traits such as gender, age, spending impulses, interests and so much more.

Of course, it can be said that the customer base of a business online is pretty large. So, if you have a company of your own, customer segmentation is something that might just be able to help you know the customers of yours.

Customer segmentation can be referred to as a phenomenal marketing tool, but only if it is implemented correctly. Customer segmentation can effective, and it can be used in improving marketing efforts, and products. And this will ultimately lead to a profit of the company. It is the customer segregation definition

This customer or market segmentation depends upon two divisions. The needs and characteristics can help you determine the division of potential customers. You can analyze from the word segments that segmentation is about characterizing customers on specific groups. It is about dividing the customers with similar interests in a homogeneous group for determining their likes and dislikes. 

In order to ensure the success of the company, it is important for the people to know about the importance of customer segmentation along with customer segmentation definition as well. So, in the next part, we are going to talk about it in the best way so that you can have some benefits.

Why Is Customer Segmentation So Important?

Well, there are so many different types of customer segmentation and people need to know what benefits are provided to the ones who practice these types. This is why we are going to talk about it right now.

In this part of the article, we are going to explain to you the benefits that come forth with this process along with some customer segmentation examples as well. So, let us get started without wasting any more of your precious time.

  • For Developing Retention Strategies

With the help of amazing customer segmentation, there is no doubt that customer retention has become a great thing. We all know that once the customers lose interest in a business, there is literally very little chance to get that interest back.

However, with the help of customer segmentation examples, this can be done very easily for sure. Retaining the customers after learning about them is going to provide some pretty great benefits to the company for sure.

You can create strategies that would retain the customers and keep them from leaving again.

  • Customer Experience Improvement

In the world of business, customer experience is everything. That is one of the main reasons why the brands want to make sure that the customers are always getting the best experience than they can anywhere.

You might be a little surprised to know that customer segmentation can be a real help in that case as well. No one wants to harm the reputation of the company by not paying attention to what the customers want.

With the amazing process and the customer segmentation examples, there is no doubt that companies will be able to know their customers more in the best way.

  • Better Targeting With Ads

In case you have a customer segment that is prepared after careful thought about the process, the ads that you send to them are going to have a much better effect for sure. Don’t you think that is a very good idea for people? We are pretty sure that this benefit of customer segmentation has clearly made up your mind.

With the help of this process and the types of different customer segmentation, it is possible to ensure that people have access to the ads that are actually of any importance to them in the best way for sure. We are certain that this is going to help them in the best way.

Types of Customer Segmentation

This strategy of customer segmentation helps you in having specific targets audience. Once the customer is segregated on an actual basis, the company can use its sales, production, and marketing. It is beneficial to determine and differentiate between the types of customers based on their interests.

Now here we are going to talk about the different types of customer segmentation. There are 4 different types of customer segmentation and you definitely need to know about it all.

  • Demographic Segmentation

We can all agree to the fact that this amazing process of segmenting the customers can help in the improvement of the customer experience in the best way. However, did you ever think how will one be able to do that? Well, with the help of certain parameters and demographics such as gender, generation, age, and education, this can be done pretty easily.

Measurable data can be collected about the audience members and that is exactly what the process of demographic segmentation is all about. This can really be a great method to start each and everything.

So, it can be segmented in terms of religion, gender, age, ethnicity, education, income, occupation, or even marital status. It helps us determine what can interest people of a particular age or gender.

  • Geographic Segmentation

Now, this is another one of the amazing types of customer segmentation that people actually need to be familiar with. The geographic segmentation is something that actually segments the audience by the state, country, region, climate, or the market size that they have.

The location of the customers that they have is the one criterion which is important in order to segment the audience and that is exactly what everyone must do. Let us provide you with an example. Porsche does this kind of segmentation to see what the customers want to have in the first place.

  • Behavioral Segmentation

When it comes to behavioral segmentation, it can be said as the process to segment the customers on the basis of the behavior that they show towards the brand. Whatever they do on the brand website or the store can be recorded and turned into useful data which is going to definitely be a lot of help when it comes to segmenting the customers.

This segmentation is based on the choice of decision and awareness. People are characterized based on their sense and decision-making values.

There are simple behaviors that can be grouped together such as adding the products to the carts but not buying them or maybe just browsers as well. So, this is a type of customer segmentation that actually works.

  • Customer Journey Segmentation

This is one of the final types of customer segmentation and you definitely need to have some information about it right now. The buying journey that the customer has had on the website is something that can also call for some segmenting because there are some common things that you can find.

We can say that the lifecycle of the customers might be unique but when you find out these similarities, the segmenting becomes a lot easier for sure. So, that is all you need to know in the best way.

How to Do Customer Segmentation

Now here we are in the final part of the article and probably the most important one as well. Here we are going to let you the tips which can help you with customer segmentation in the best way.

  1. Prioritize The Goals

You need to make sure that you take into account the goals that you have. While attending to the needs of the customers, don’t forget about the objectives that you have for the company as well. So, this is one tip which we think is going to help you out in the best way without any trouble or hassle.

Customer is definitely a priority for the businesses these days. However, having an idea about the company goals is also a very good thing.

  1. Practical Segmentation Is Important

When you are trying to do the customer segmentation process completely, you need to keep in mind that the efforts should actually be sufficient so that you can make efforts to target the people who you have just segmented for sure.

In case you have got many different types of segments, there might be some problems. Not to mention that the management of the segment definitely going to be a difficult task. So, it is always better to have an approach that is practical and amazing, right? We are pretty sure this tip would be a help.

  1. No Segmentation Bias

Now here is another important tip that we think is going to be really helpful for your process of customer segmentation in the best way for sure. You need to make sure that you consider every single person in the segments that you are trying to create. Keeping a biased approach is definitely not going to help you out so you need to avoid that at all costs.

  1. Positioning And Judgment

The product positioning really has an important role to play in the entire process for sure. You need to make sure that you are positioning the right product to the right customer segments in the first place. Otherwise what is really the use of having anything, right? We are certain that you will think about it once.

Examples of customer segmentation 

Customer segmentation examples are present here to make you aware of the characterization and how it can be done. When you see the examples here, you will realize that how people are segmented and how this is successfully implemented. 

  1. Mobile Operators 
  2. Food chains 
  3. NGOs
  4. E-commerce Websites 
  5. Banks and other financial institutions 

Conclusion

So, there you go people. These are some of the most important details that you definitely need to know about the customer segmentation process. With this information, you can actually have personalized marketing experience and have all the benefits for the company as well.

Finally, we can say that Customer segmentation is about reading the customer’s needs based on different aspects. They can be determined based on behavior, demographics, location, and other things.  The customer segment helps the companies to understand their market and the demand of the market more effectively. 

It is beneficial for the organization to know their customers, and this one is the best way to achieve it.

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