Customer Segmentation: Whatever your brand’s specific niche, each of your customers is an individual – and they deserve to be treated as such. However, it can be difficult even for a small to medium-sized business to serve each customer on an individual level. However, through customer segmentation, you can get pretty close.
What Is Customer Segmentation?
Customer segmentation is the division of a company’s customers and potential customers into groups with similar characteristics and pain points. This division contributes to the creation of targeted marketing and sales campaigns. Customer segmentation makes communicating with leads, prospects, and customers more personalized and efficient.
5 Types Of Customer Segmentation And Implementation Examples
There are five types of customer segmentation, they are:
- geographic segmentation
- B2C demographic segmentation
- B2B demographic targeting
- psychographic segmentation
- behavioral segmentation
Customer Segmentation: Geographic
Geo-targeting lets you target a campaign’s audience based on where people are. Segments can be as comprehensive as a country or region or as narrow as a street of houses in a city. Geographic targeting is helpful for both large and small businesses. Large companies with international markets may offer products or services specifically to audiences in specific locations.
For small businesses, geo-targeting can target specific customers without over-investing in advertising on impressions that will not act on lead capture. For example, a local pizzeria could show its ad only to people within the city in which they are located.
Geo-targeting is a type of customer segmentation that is extremely easy to implement. Many companies are usually able to obtain the addresses of their customers through the use of forms, for example, present on landing pages.
Customer Segmentation: B2C Demographics
Demographic segmentation segments the market based on specific characteristics of the audience. Customer segmentation characteristics generally include:
Also relatively easy to implement, demographic targeting can be helpful in several ways. Luxury brands may choose to market a demographic group consisting of people with a family income of more than R$15,000. Colleges may use messages in their advertisements that appeal to 17-22-year-olds.
Customer Segmentation: Demographic B2B
Demographic targeting can also be used in B2B markets. In this case, standard demographics include:
- company size,
- time working for the company and much more.
Agencies may choose to segment the market by industry when looking for future clients. An advertising agency that specializes in automobile advertising can segment the market by industry. They can segment the market by the role or position of the company’s decision-maker when choosing to contact marketing managers and creative directors.
Customer Segmentation: Psychographic
Psychographic segmentation is much less concrete than geographic, and customer demographic segmentation since the characteristics used for the segment are less “tangible” than the latter two.
Psychographic segmentation divides the market into principles such as:
- social class,
This type of customer segmentation is significantly more challenging to implement than geographic or demographic segmentation. To properly segment the market based on psychographics, marketers must take the time to get to know their current and past customers. This includes clearly defining the buyer’s ideal person for the product or service and developing relationships with the customer base, representing the persona you want to serve.
Customer Segmentation: Behavioral
Behavioral segmentation is the practice of dividing consumers into groups according to any of the following attributes:
- purchase patterns.
Behavioral targeting can be used in several ways. By targeting based on awareness, companies can send their loyal customers an advertising campaign while also targeting an additional drive to potential customers who have not built a relationship with the brand. By targeting based on occasions, companies can target less price-sensitive consumers during times like the graduation season and the holiday season. Behavioral targeting allows marketers to be more relevant and produce messages to rescue the desired target market.
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