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Customer segmentation is the process of dividing your target market (potential customers) into groups based on shared characteristics. For example, you can segment customers based on their needs, behaviors, lifestyles, or other attributes that may impact their purchasing behavior.
The better you understand your customers, the easier it is to sell to them. Creating effective customer segments helps you gain unique insights on how to capture your audience’s attention, increase sales, and keep your customers happy.
Here are some of the many benefits of customer ...
We’ve gathered everything you need to know in these four steps to customer segmentation research.
Keep in mind that the research process may look slightly different for each company. How you segment your customers may depend on how much you already know about your target market and ...
Type 1: Demographic Segmentation
Demographic segmentation refers to the grouping of customers based on demographic characteristics. This includes variables such as:
Psychographic segmentation refers to the breakdown of customer groups based on internal, psychological characteristics that may influence their buying behaviour, including:
Geographic segmentation refers to the segmentation of customers based on the region that they live and work in, and the characteristics of that location. This includes:
Behavioral segmentation is the grouping of customers based on their behavior patterns through their interactions with the company. Companies using behavioral segmentation typically segment customers based on their past purchase behavior (timing, usage, frequency) or stages in the buyer journey.
Firmographic segmentation is similar to demographic segmentation but has to do with characteristics that describe a company or organization, which can be useful for business-to-business (B2B) customers.
This includes attributes like company size (revenue and/or the number of employe...
Reviewing the different segmentation categories can help you brainstorm what kind of questions you want to ask your audience, and how you will define or describe your segments. We recommend testing more than one type in your segmentation research.
That way, even though you pick only...
Ideally, you should start your customer segmentation process with preliminary research. The easiest way to do this is with a customer segmentation survey. Surveys allow you to quickly collect deep qualitative and quantitative data on your target audience.
The first step is to design...
In this step, you’ll test hypotheses and themes revealed in the exploratory study to solidify which characteristics are significant differentiators for your target segments.
The insights from your exploratory research are an essential guide for your main study questions. If you skip this p...
Creating customer segments is an artistic process as much as it is scientific, so take your time with this step and keep an open mind when analyzing the data.
Statistical analysis tools can help you identify which variables are significant and which ones are not, but you will also n...
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This will help small businesses and designers to pick the best colors for their brand kits or logos.
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Guided Sales Using AI: The Matchmaking Of Customers with Products and Services
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