Categories: Business

5 Things To Consider In Your Customer Segmentation Strategy

How to Create a Winning Segmentation Strategy – Today, the way we market and sell products is changing. More than ever, consumers seek personalization when purchasing. 92 percent of marketers say prospects and customers expect a tailored experience.

If you want your business to survive, it’s important to consider factors like email and website personalization. Personalization is also essential in marketing. Not to mention in creating assets like forms, surveys, and quizzes.

The ability to create materials that appeal to specific groups of people has never been more important, but to understand these different customers, you first need to learn about them. To do so, you need a good customer segmentation strategy.

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What Is A Customer Segmentation Strategy?

Customer segmentation involves breaking down a target market into different demographic groups, geographical areas, and behaviors. Is there a certain demographic you want to appeal to? Perhaps you’re trying to identify different buying behaviors or test the appeal of a product?

Through customer segmentation, you can break down a target market into specific groups. This allows you to learn about particular customers. This information can be used to create more personalized content and tailored marketing.

By creating the kind of content that appeals to different groups of customers, you can build brand loyalty and recognition. With the right strategy, you can also identify which areas of the market to target and segment. This allows you to streamline lead generation campaigns.

Here’s a list of things you should consider when crafting your customer segmentation strategy.

1. Your Market

Before you can even begin to plan your customer segmentation strategy, you need to know the kinds of customers that will be included in your segments. It might sound obvious, but many businesses fail to do basic research into their target audience. Without a proper understanding of this, your business is doomed to failure.

By understanding your market, you can create more useful segments. This will make your products more appealing and allow you to create personalized content, retain customers, and generate more revenue.

Take the time to research your target audience. Learn about their demographics, interests, and the kinds of content they respond to. If you’re unsure about which groups might be interested in your product or service, start by investigating your competitors. Which demographics do they attract?

Once you’re confident you’ve identified your target market, begin to break them down into psychographics. These help you to know the characteristics of your audience. Psychographics include:

The different personalities within your target market.
The attitudes of your audience.
Their values
Their interests and hobbies.
Their lifestyles.
Their behaviors.

These characteristics should inform how you create your segments. With this information, you can improve your marketing and product creation too.

2. Your Goals

From the outset, know what information you want to receive from segmentation. A prospect is a potential customer who fits criteria relating to your business offerings. Determining if a contact is a sales prospect is a key step in the selling process.

What do you want to learn about your prospects? What kinds of information would help to improve your future products and marketing? Consider which sales apps can help you to reach your goals.

If you’re planning on releasing a new product, think of ways you can segment your audience to best measure product success. With careful planning and a clear set of goals, you’ll be able to get much more useful information from your segments.

3. How To Segment

There are various types of customer segmentation to choose from, and each has its benefits. You’ll likely use a combination of these when looking at your prospects.

Here are some of the most useful ways to segment your audience:

Behavioral Segmentation

With behavioral segmentation, you divide customers and prospects based on their behavior while using your app, website, or other content. This allows you to identify important information. Examples are the first product they purchased, the kinds of products people buy together, and much more.

Behavioral segmentation is one of the most useful forms as it allows you to understand the buying behaviors of your customers.

Geographic Segmentation

Geographic segmentation allows you to segment users based on their location in the world. This includes using information such as a user’s:

Country
State/province
City
Zipcode

This data can be extremely useful when trying to find information about users from a specific region or culture. You can gauge how these segments are reacting to your marketing, for example. You can then use this information to either alter your messaging or discontinue a product that isn’t connecting with a certain market.

Demographic Segmentation

Demographic segmentation allows you to break prospects down based on various traits, such as age, gender, family size, and income. Perhaps you want to see how a certain product fares with a younger demographic or single parents? With demographic segmentation, you can find this information and use it to improve your marketing and product design, and better understand your customers.

Firmographic Segmentation

This form of segmentation is useful when dealing with B2B prospects. You can categorize users by company size (the amount of revenue they collect, the number of people they employ, or the number of products or services they provide), industry, or their sales stage.

With firmographic segmentation, you can improve your B2B customer touchpoints. For example, perhaps you’re looking to target customers in the catering industry. If you’re a B2B business, this is one form of segmentation you don’t want to neglect.

4. Customer Behavior

When measuring data on your segmented audience, think about their behavior. After all, if you don’t understand your would-be customers, your segmented data is useless. The way people react to content may be different depending on their demographic, nationality, and culture, for example.

Identifying a specific segment of your market is a great start, but to create the best and most appealing kinds of content, you need to understand them. There are lots of ways you can achieve this. Speaking directly to your customers is one, so why not check your call history and logs to better understand their pain points?

Another useful way to find out about your customers is by segmenting further. What kinds of interactions are they having? Are there any similarities between different prospects within your segments?

This could involve finding information about prospects who’ve added a product to their cart but failed to enter any details to make a purchase. It could also mean gathering information about customers who view products but don’t add them to their baskets.

By spotting trends, you can adjust the way you market different products to your target audience. Look for key data, such as how a prospect reacted to a certain piece of content, for example.

By identifying this, you can work to make your product descriptions, marketing materials, and other pieces of content more appealing to certain customers. This might mean focusing on mobile users specifically or skewing your marketing more heavily toward social media users.

As simple as this advice may seem, it’s often overlooked by businesses, who do not spend enough time analyzing these behaviors.

5. Dig Deep

To properly analyze behaviors and understand data collected from your segment, you sometimes need to dig a little deeper. This means further segmenting groups of customers into very specific micro-segments.

With a normal segment, you may use information about a customer’s location, job title, or age. With a micro-segment, you can include all three of these categories, helping to provide a much narrower set of results.

If you’re trying to market toward a particular part of your audience, there’s no better method than creating a micro-segment. In a world where customers value personalization, the benefits of this cannot be overstated.

80 percent of those who classify themselves as frequent shoppers say they only shop with brands who personalize their experience. With information gained from micro-segmentation, you can find new ways to meet customers’ needs.

If used alongside good quality communication tools, micro-segmentation can help you provide a better, more personalized experience and improve your customer service. Think about any particular interactions you might want to track and then micro-segment accordingly.

Get Segmenting

Hopefully, you realize by now that, if done right, customer segmentation can be incredibly useful. The information it provides can transform your sales and marketing automation efforts and make them much more effective.

By giving you insights into your market and helping you develop a clear set of goals, customer segmentation can elevate your business to new heights. So, what are you waiting for? Get segmenting today.