Almost everything you need to know about Customer Segmentation

What is customer segmentation? Why segment customers? Learn everything you need to know about customer segmentation right here.

So, what is Customer Segmentation?

Moreover, these customer groups can be utilized to create marketing personas. The marketing personas are basically a representation of a customer segment, and it is common for companies to build various personas to meet their diverse customer segments.

Why should you segment your customers?

Let’s consider a chocolate manufacturing company. Since different customers prefer different tastes, a single type of chocolate won’t work well. So those who like chocolate A are grouped together, and those who prefer chocolate B are grouped together. These groups can again be subdivided based on the prices and sizes of the chocolates. This segmentation helps companies to gather deeper information about the target audience and interact with them more comfortably. It also helps them prepare more efficient marketing and sales campaigns.

Some benefits of segmenting customers are

Types of customer segmentation
Here customers are divided according to demographic factors like age and gender. Socioeconomic factors like household income, marital status, profession, and education also come under this category.
In geographic segmentation, customers are divided by their location, usually at the country and city levels. Geographic segmentation is greatly helpful for global businesses where the requirements of customers change wildly from city to city.
Dividing customers according to their buying habits and online behavior, including platform and technology usage, is called behavioral segmentation. It is very useful to find effective marketing techniques as most of the customers come across online ads.
Psychographic Segmentation divides customers based on their personality, beliefs, and interests. Now that we know the basics of customer segmentation, let’s move on to the step-by-step process of segmenting your customers.
How do you segment customers? – Step by Step Process

The following steps will help you segment your customers more easily and efficiently.

STEP 1: Identify your target audience

First of all, determine the customers that give you the highest value. For example, which of your customers are essential for your business? The significance of the particular customers depends on your product or service.

For example, for a B2B SaaS feedback management company, CX professionals, customer support professionals, product managers, and customer success people could be the target audience.

STEP 2: Determine the type of segmentation

The next step is to identify the characteristics according to which the customers can be classified. For example, it can be the attitude of your customers to the product, their buying behavior, and so on.

After knowing your audience, identify the highest value customers (the ones that give you most business) and ask them questions to understand their challenges, pain points, expectations, frustrations, roles and responsibilities, etc. You can ask,

• What keeps you awake at night?
• What are the challenges you are facing?
• What job segment are you responsible for?
• What frustrates you?
• What are you looking for?
• What knowledge or tools do you need for your job?

STEP 3: Use cluster analysis and define segments

About the Author

SurveySensum is a Customer Experience Management Platform that helps you make customer feedback actionable.

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