Customer segmentation involves categorizing customers into individual groups with uniform characteristics. This allows for planned communication and a closer relationship between companies and customers. Customers expect support tailored to them – in other words, individual advice. Treating all customers the same is a method doomed to fail.

What is customer segmentation and why is it so important?

There are three different types of customer segmentation. A-priori segmentation relies on publicly available factors. These include age, gender, geography, education, and income. This segmentation is based on easily accessible information, not on extensive analyses and experience. A-priori segmentation involves little effort but provides only limited strategic assessments.

Needs-based segmentation is based on customers‘ specific needs regarding services and products. These needs are identified through market research or experience.

Value-based segmentation relies on the economic value of a group of customers to the company. In this way, the perfect customer who will bring the greatest profit can be determined.

The three types of segmentation can also be combined to achieve a greater effect. Furthermore, these segmentation types are universally applicable.

Reasons for customer segmentation

Customer segmentation makes it possible to identify the best and most suitable prospects and leads. By segmenting by number of employees, industry, needs, and other factors, the perfect customer can be found. One should focus on those people who will benefit from the services and products offered by one’s company.
It is important to focus on the right sales opportunities.

Campaigns adapted to customer groups should be prioritized by urgency. It is also advisable to categorize customers by whether they are new customers, regular customers, or key accounts, i.e., the best customers.

It makes sense to contact the first two groups every three months so that they also become the best customers. One’s own service improves when one knows the best customers, when one knows who these customers are and what the best customers appreciate about one’s company. With this know-how, contacts from the first two segment groups can be developed into key accounts.

Sending a standard message to all customers is not a good approach. The marketing message should be individual and relevant to the person.

Conclusion

Targeted customer segmentation has many advantages. One learns who their core target group is, which characteristics individual customers share, and which pain points need to be addressed to develop customers further.

Ultimately, valuable insights for acquiring new customers can also be gained from these findings.