Guide for the power of customer segmentation

What is Customer Segmentation?

Customer segmentation (sometimes known as market segmentation) is the division of potential customers into discrete groups depending on customer segmentation strategy.

However, these groups from different places but they have the same needs and main pain points that your product could help in solving it.

Usually, marketers divide customers into groups to target the right people with the right messaging about their products or services. As a result, this will increase the success of your marketing campaigns. 

Moreover, targeting each group with different strategies will contribute to extracting maximum value from both high and low-profit customers, help at the same time professionally to meet your customer expectations.

Generally, we divide customers based on two factors

(the customer needs in purchasing your product and the customer persona, or the buying characteristic).

Why customer segmentation has guaranteed benefits to your business?

The benefits of customer segmentation are so important because it could include many types of business and support increasing sales and achieving the marketing strategy.

Because it is not logical to design your marketing strategy without knowing your target audience and your market segmentation.

Furthermore, current segmentation will help you to develop your product and engage your customer in the target segment.

So, in case of doing customer segmentation well, you will gain the following amazing results:

1- Improve personal communication:

One of the main principles in market segmentation is enhancement your communication with the customers, build a relationship with them, gain their trust.

Besides, will tailor your content marketing based on your customer’s unique needs.

2- Amazing marketing campaigns:

Customer segmentation enables entrepreneurs to innovate more marketing messages, these messages are not in general, but it is focusing on special segment and customized for each segment, it will grab your customer interest in your product and support the indirect way in marketing strategy.

3- Getting high cross-selling opportunities:

For better selling, you have to know the behavior of your customer during the buying journey.

On the other hand, it could help to identify customer segments.

Be smart in dealing with your customer, by providing special offers to those who have just bought from, where that can help your sales team to achieve their target, reach more customers and hence increase revenue.

4- Enhance your customer service and offers:

To do that you have to understand the needs of your customers, know more about them to prepare for challenges different groups are likely to experience.

Moreover, you have to get a clear idea of who your customers are and what they want to get out of using your products or services.

Hence, you could optimize your offerings.

Thus being able to meet customers’ needs and expectations, which would further result in improved customer satisfaction.

As a result, customer loyalty will be increased and customer retention too and it will promote the expansion of new products and services relevant to the target audiences.

5- Gaining more revenue:

Dividing your customer into particular segments could save both of your time and money, promote the stability of your customer base and increase your margins.

Otherwise, the cost of the customer segmentation process will be long and expensive with bad results with higher churn rate and lower upsell potential.

How to segment customers?

First of all, there is a modern technique used called Customer segmentation analysis which analyzes specific data about customers, and use these data to determine the suitable customer segmentation model such as (Technographic, Demographic, Psychographic, Behavioral, Needs-based, Value-based)

you will use for each group into segments.

For best and smart way for market segmentation is collecting data from customers during purchasing.

It is easy to obtain information such as (geography, company, job title, the top products in the customer purchasing list, etc.).

In case you couldn’t collect enough data, try to use another way by asking customers to fill out a customer evaluation form.

On the other hand, there are some tools for customer segmentation analysis you can use, such as:

Google Analytics, Kissmetrics, Segment, Piwik, Yandex, etc. For more information, you could watch our webinar about this.

For perfect customer segmentation you have to do the following steps:

* Determine your market segmentation goals.

* Collect data about customers, divide them into groups.

* Target your customers.

* Following up for your marketing strategy, and analysis and amend it.

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