What are the different types of customer segmentation techniques and how do they differ?

Demographic data is relatively easy to obtain and can likely drive relevant messaging, making it an ideal choice for grouping large populations. However, in addition to potential limits mentioned above, it can be tempting to leverage as many demographics as possible in the segmentation, creating more segments than can be managed. Limit demographics carefully to those that are directly relevant to how consumers view your business.

I would like to take this from B2B channel sales POV: 1. Company Size: Micro, Small, Medium, Large: Categorizing partners based on company size allows for tailored engagement 2. Industry Vertical: Healthcare, Finance, IT, Manufacturing 3. Geographic Location: Local, National, International 4. Partner Maturity: Emerging, Developing, Established 5. Decision-Making Authority: End Users, Influencers, Decision Makers: stakeholder group to ensure buy-in across the board. 6. Technological Sophistication: Early Adopters, Mainstream Users, Late Adopters: 7. Budget Constraints: How flexible the company is when it comes to expense on marketing

The most common geographic segmentation is to define market areas based on an area that group customers by store location, regulatory boundaries or simply as "in-market" and "out-of-market" for in-store vs online offers. Beyond this, geographic segmentation has little value on its own as it fails to describe consumer motivations that you can leverage.

Since psychographic segmentation is less readily available and when collected by surveys is typically performed on a small sample, it has limited value as the means for defining segmentation itself. Many businesses see the most benefit from psychographic segmentation as a layer on top of other segmentation. For example, if you have created segments based on demographics and geographies as described above, building out personas from psychographic data can help explain differences in segments that drive behavior you wish to affect.

Generally, behavioral segmentation groups consumers by different behaviors such as those who make a lot of small purchases vs those who make infrequent, large purchases. This type of segmentation connects well with business objectives. For example, marketing spend against consumers in the infrequent, large purchase segment is not as likely to be as efficient as spend against frequent buyers. Using that knowledge, more efficient contact strategies can be aligned to segment behavior.

Segmenting solely on where a customer is in their journey can be difficult, as much of the data prior to the first purchase is either invisible or not readily connected to a consumer identity. For example, if a consumer is researching products by search, you're unlikely to have the data to recognize this and classify the consumer properly. It's also difficult to accurately recognize attrition risk. That said, customer jouney segmentation can also function as a layer that will enable you to improve on demographic or other segmentation by defining your motivation -- typically, to move the prospect to the customer stage and once done, grow and maintain that customer relationship.

Your segmentation will be most effective if you are able to make an informed decision based on your answers to the questions above. Each of these approaches provide different views of consumers but need not stand alone. Before choosing, be sure you pick options that will allow you to meet your objectives, have the availability of data necessary to support your needs and will create enough segments to be relevant within your capacity to vary messaging. Consider combining the approaches for the best result!

Socio Cultural segmentation could be another type which could be considered but for taking the informed decision one must have the metrics to test the hypothesis of the segmentation which we are trying to apply.