Customer segmentation methodology

After reading this article you will learn about customer segmentation methodology. What is Market Segmentation?

Customer segmentation methodology

Elizabeth Bell June 29, Five Types of Customer Segmentation and Examples of Implementation Customer segmentation is imperative when trying to send messages to a target market. Segmenting consumers enables marketing teams to stretch budgets and make the most of marketing dollars by reaching the most ideal visitors who are Customer segmentation methodology to become leads, without wasting money on impressions that will never turn into conversions.

Additionally, by reaching niche groups of people, marketers can craft messages specifically for them. This communication will enable marketers to connect with the target audience, develop relationships, and communicate messages that resonate.

There is an excess of ways to segment the market in order to reach the most ideal consumers for certain products or services. Some of these include geographic segmentation, demographic segmentation, psychographic segmentation, and behavioral segmentation.

Segments can be as broad as a country or a region, or as narrow as one street of homes in a town. Geographic segmentation is useful for both large and small businesses alike.

Large businesses with international markets may choose to offer products or services specifically for audiences in particular locations.

For example, Home Depot may target US northeastern states when advertising a sale on snow shovels. Presenting this ad to Floridians, for instance, would be irrelevant, unnecessary, and could even desensitize the audience to future advertisements.

Particularly for small businesses, geographic segmentation can be used to target specific customers without wasting excess advertising dollars on impressions that will not turn into leads.

For example, a local pizzeria could present their ad to only people within the town they are located.

Five Types of Customer Segmentation and Examples of Implementation

Demographic B2C Demographic segmentation is segmenting the market based on certain characteristics of the audience.

Characteristics often include, but are certainly not limited to: Also fairly easy to implement, demographic segmentation can be useful in a variety of ways.

Colleges may use messaging in their advertising that appeals to year olds. Demographic segmentation is even more efficient when targeting multiple segments at once.

Bridge ran an email marketing campaign where we targeted local geographic females demographic: Combining various customer segmentation criteria has the potential to reach a very targeted niche market and drive sales while maximizing the value of every marketing dollar spent.

In this case, common demographics include: Agencies may choose to segment the market by industry when searching for prospective clients. An advertising agency that specializes in auto advertising may segment the market by industry. They can further segment the market by role when opting to contact marketing managers and creative directors.

Again, using multiple demographic criteria while segmenting targets a very specific list of prospective customers. Psychographic segmentation divides the market on principles such as lifestyle, values, social class, and personality.

This type of customer segmentation is significantly more difficult to implement than geographic or demographic segmentation. To properly segment the market based on psychographics, marketers must really take the time to get to know their current and past customers.

Customer segmentation methodology

This includes clearly defining the ideal buyer persona for the product or service and developing relationships with the customer base. A prime example of psychographic segmentation is targeting those who are budget conscious. These people value a good deal and tend to be smart shoppers.

Target ads to this segment by appealing to their intrinsic budget-savvy personality. Discount stores, like Wal-Mart, utilize this tactic nicely. Behavioral Behavioral segmentation is similar to psychographic segmentation on the basis that it is less concrete than demographic or geographic segmentation.

Behavioral segmentation is the practice of dividing consumers into groups according to any of the following attributes: Behavioral segmentation can be used in a variety of ways.

When segmenting based on awareness, companies may opt to send their loyal customers one ad campaign, whereas target an additional campaign to prospective customers who have yet to build a relationship with the brand.

What is customer segmentation? - Definition from

When segmenting based on occasions, companies can target consumers who are less price sensitive during times like graduation season and the holiday season. Behavioral segmentation allows marketers to be more relevant and produce messaging that will resonate well with their desired target market.

Read more on behavioral segmenting here. Segment Smarter Each style of customer segmentation carries its own unique set of benefits, but using them in conjunction with one another will create maximum impact.Market segmentation was first described in the ’s, when product differentiation was the primary marketing strategy used.

Customer data collected by companies for internal use; There is no ideal methodology that works with every segmentation study. Each methodology has advantages and disadvantages. Segmentation studies generally.

Oct 30,  · Customer Segmentation is the bedrock of any successful and effective marketing campaign. It would be a waste of marketing spend if, for example, an ad campaign is targeted to all the thousands of your customers.

To what degree are customer needs being met? approaches to segmentation Best Segmentation Practices and Targeting Procedures that Provide the most Client-Actionable Strategy.

Customer segmentation methodology

Within the confines of our empirical test, each segmentation method yielded a different segmentation solution. Indeed, within the same method, different variable classifications and ordering of data records can produce dissimilar solutions.

Market segmentation The main reason behind the market segmentation is to make easier to address the needs of smaller groups of customers, particularly if they . Customer segmentation is the practice of dividing a customer base into groups of individuals that are similar in specific ways relevant to marketing, such as age, gender, interests and spending habits.

Comparison of Segmentation Approaches