Increase your sales with a smart customer segmentation using Artificial Intelligence

Customer segmentation has traditionally been a fundamental tool in marketing and sales strategies. However, the way in which this segmentation has been carried out has been largely static and based on assumptions or past experience. It is common for marketing teams to group their customers into pre-defined categories, such as company size or industry. It is common for marketing teams to group their customers into pre-defined categories, such as company size or sector. For example, companies are grouped into segments such as ‘less than 10 employees’, ‘10 to 50’, ‘50 to 200’ and ‘more than 200 employees’.?

While this approach has worked in the past, it is limited because it does not consider the specific and dynamic characteristics of individual customers, which can lead to sub-optimal strategies. A company with 49 employees is in fact much more like a company with 51 employees than to a company with 10 employees, but traditional segmentation would place these customers in different categories. This is where intelligent segmentation comes in, using artificial intelligence (AI) to analyse large volumes of data and identify complex patterns that the manual approach cannot capture.??

Limitations of traditional segmentation?

The traditional method of segmenting customers into fixed, pre-defined categories has its limitations. This type of fixed segmentation divides customers into groups based on criteria such as company size or sector but ignores important details that could be key to defining the most profitable and effective segments.?

For example, a company that segments its customers based on the number of employees might divide them into the following categories:??

• Less than 10 employees?

• Between 10 and 50 employees?

• Between 50 and 200 employees?

• More than 200 employees?

At first glance, this classification may seem logical, but it does not necessarily reflect the reality of all clients. It is possible that the majority of clients in this company are concentrated in two specific categories, such as between 8 and 12 employees and between 45 and 55 employees. Instead of recognising these concentrations, the traditional approach divides them into artificial categories, which can miss important information and opportunities to create more effective strategies.?

Intelligent segmentation with AI: discovering true patterns?

Intelligent segmentation using artificial intelligence helps to automatically identify real patterns in customer data. Instead of being based on previous assumptions, AI analyses multiple variables for each customer and identifies groups or clusters that may not always be obvious at first sight.?

With AI not just one isolated metric is taken into account, i.e. company size, but many more variables can be analysed jointly, such as:?

• Purchase frequency?

• Type of purchased products or services?

• Annual invoicing?

• Geographical location?

• Activity sector?

• Web and social media behaviour?

This multi-dimensional approach allows companies to find groups of customers who have similar behaviours but do not necessarily fit into pre-defined categories. With the identification of these real segments, companies can design much more precise and effective marketing and sales strategies.??

Practical example: a real case of segmentation?

Let’s imagine a Software company that sells solutions to small and big companies. With traditional segmentation, sales teams divide their customers based on the number of employees, as mentioned above. However, implementing AI-based intelligent segmentation, they discover that their customers are actually grouped into more defined clusters, such as:?

• Small companies (less than 15 employees) that mainly use a basic version of the software and have a shorter selling cycle.?

• Medium-sized companies (between 40 to 60 employees) that require personalised service, with extended support and a closer relationship with sales team.?

• Big companies (100+ employees) that tend to buy full solutions and have longer selling cycles, but with more lucrative contracts.?

This more detailed approach highlights that real customer cores do not strictly follow traditional company size categories. Instead, they depend on other factors, such as product complexity and purchasing behaviour.?

Benefits of smart segmentation to increase sales?

Using artificial intelligence to identify real segments within your customer base, sales and marketing strategies become more efficient and effective. Some of the key benefits include:?

Personalised offers and pricing: With a more precise segmentation, you can adjust your prices and offers according to the specific needs of each group. If you know that medium-sized companies tend to need more support, you can offer them personalised packages that respond to those needs.?

More efficient marketing campaigns: By knowing your customers better, you can create much more targeted marketing campaigns, with messages that respond better to each specific segment. This increases conversion rate and reduces customer acquisition costs.?

Better resource allocation: Identifying the most lucrative segments allows you to better allocate your resources, focusing on customer groups that have greater growth potential and avoiding overspending on less profitable segments.?

Optimising business strategy: Intelligent segmentation not only allows you to identify the characteristics of your best customers, but also helps you to find opportunities that may have been missed until now. For example, you may discover a customer segment that you had not considered a priority, but which has a high growth potential.

How to implement intelligent segmentation?

To implement intelligent segmentation, it is necessary to follow some steps:?

• Data collection: The first step is to have a reasonable amount of relevant data on customers including demographic and behavioural aspects. The more relevant information collected, the more precise the segments AI will be able to identify.?
• Using AI and machine learning tools: Then, you must use AI-based data analytics tools that can identify client patterns and clusters. Some platforms offer advanced functionalities for customer segmentation that use machine learning to continuously learn from the data.?
• Analysis and adjustment: Once the segments have been identified, it is important to review the results together with marketing and sales team to understand the new patterns and adapt the strategies accordingly.?

Summary?

Customer segmentation has been a common practice for decades, but traditional approaches are often insufficient when it comes to understanding the complex and dynamic patterns of current customers. Artificial intelligence has transformed this process, making it possible to discover the true concentration cores within the customer base beyond pre-defined static categories.?

Implementing intelligent segmentation will not only improve your sales but will also allow you to provide a more personalised and effective customer experience, maximising the value of each interaction.?

In nazaríes intelligenia, we offer an AI Strategic Plan service that allows any company to structure its AI initiatives in order to have a real impact on their business objectives. We know that beyond generative AI, predictive AI, optimisation and classification solutions have the power to transform key business areas and deliver a real distinctive value. Want to know more? Contact us at [email protected] ?

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