Customers can be segmented into groups (or segments) based on various characteristics or factors. Market segmentation also refers to this process. By categorizing your customers into groups, you can target marketing to each group in a way that maximizes their value to your company.
Customer segmentation can be based on a wide range of characteristics, but the most popular (and easily accessible) are:
- A person’s age, stage of life (retired, new parents, students, etc.), gender, and marital status are all factors that can affect their health.
- Location, suburbia, and rurality are all geographical factors
- The type of products purchased, the value of the purchase, the frequency of the purchase, as well as how customers respond to marketing communications or social media promotions
There are other factors that can provide more detailed information about customers, but to access this information, there may be a need for additional tools; we will discuss these topics on our next article.
What are the benefits of segmentation?
Do you want your campaigns to succeed in the best way possible? Segmenting your customer is a must, especially if you want to increase your company’s value and establish a strong brand identity.
No matter how you position your business, be it B2B or B2C, the variety of people among your customers are clients can shock you. It is nearly impossible to characterize them all. At this point, segmentation becomes your most powerful tool. Marketing professionals always say that you should know your target audience and customer base before everything, but for larger businesses, it is only possible to learn about them through segmentation.
Depending on different segments and their demographic info, you can start getting to know your audience and decide on your messaging. When your audience is segmented in the right way, your message can be more effective and appropriate. Effective messaging means your message is more attractive to your audience and captures their attention. A good messaging strategy holds a strong place in your customers’ minds.
With segmentation, you can also see the difference between your already existing customers and your potential customers. This way, you can communicate with different types of people in an efficient but also effective way, nurturing your leads while gaining new customers.
Types of Segmentation
Now that you know segmentation is an absolute necessary for even the smallest companies, it all comes down to the question of how to do it. There are several criteria you can use to segment your audience. One size does not fit all in this case and the scale of your business, the industry you are in and the target audience’s culture and location can make a huge difference so, try to keep them in mind.
You can segment your customers depending on their location. The criteria you can use include, city, zip code, neighborhood, radius, whether it’s rural or urban. You can even target smaller spaces for effective targeting.
These include age, gender, marital status, ethnicity, economic status are all included in the criteria for demographic segmentation.
The criteria above will not be very important if your business is a B2B company. Instead, you need to focus on the scale of the companies and the decision-makers.