By InterQ Intern, Kiana Walden
In today’s world of personalization and targeting, generic messaging sent to everyone isn’t going to cut it. If you think about the different groups of people in your life — your family, teachers, friends, coaches, boss, significant others — chances are you don’t communicate with each of these groups the same. Most likely, you communicate with your boss in a different way than you would with your friends. Well, the same goes for your customers! It’s inevitable that your customer base consists of various group subsets from many different locations all of whom have specific traits, needs, pain points, and expectations of your company.
Customer segmentation is the process of divvying up potential customers into defined groups based on common characteristics (similar to buyer personas) so companies can market to each group effectively.
Why Should I Segment Customers?
Segmenting helps your company tailor its marketing, service, and sales efforts to each of your various audience groups. This process results in increased customer loyalty and conversions as well as helping:
- Develop targeted marketing strategies that will resonate with each unique group of customers by tailoring to their specific need and interests
- Create more personal customer relationships
- Attract most profitable customers
- Choose the most effective communication channel (email, social media, etc.) for each segment
- Find ways to improve your product/service for each customer group or identifying a need and inventing new products/services
- Upsell related products/services
- Improve customer service
Now that we ‘ve covered customer segments and why they are worth investing in, we’ll discuss the methods of obtaining these segments.
How Do I Segment Customers?
Some information, such as job title, geographic location, purchased products, etc. can be gathered from customers’ purchases. Other information to segment customers, however, requires a company who can gather data about customers such as demographics including age, gender, marital status, and, using these demographics, can identify patterns that lead to the formulation of accurate customer segments. Let’s say, for the sake of good illustration, you consult InterQ (yes- that’s us!) to develop your company’s customer segments. We would use methods including (but not limited to) …
- In-person interviews
- Focus groups
- Surveys
- Research on market categories
Once your customer segments have been identified it’s time to use them, which we’ll discuss below.
I Have my Customer Segments, Now What?
After you’ve accurately segmented your customers, it’s time to incorporate them into your marketing/service/sales strategies. Your customer segments can guide how your company markets to each segment, how to cater to services to your customers, what products to promote to each one, or even what products to develop to better cater to a specific customer segment. For example, if your company sells CRM software, how you market the features that sales teams will use versus marketing teams will widely be based on their different needs; understanding their unique pain points and use-cases will help you customize your messaging and product-positioning.
Properly segmenting customers can help personalize and target your message and grow your business by boosting conversions, reaching your audience through marketing, service, sales efforts, communicating to your audience effectively, and meeting your customers’ specific needs and expectations.
