Customer segmentation is necessary when communicating with your target audience. By segmenting consumers, it will be easier to reach the most ideal visitors who are more likely to become leads. By reaching a specific group of people, marketers can design messages specifically for that group. This communication will help build relationships and build messages that resonate.
Customer Segmentation requires managers to:
• Divide the market into meaningful and measurable segments according to customers’ needs, their past behaviors or their demographic profiles.
• Determine the profit potential of each segment by analyzing the revenue and cost impacts of serving each segment.
• Target segments according to their profit potential and the company’s ability to serve them in a proprietary way.
• Invest resources to tailor product, service, marketing and distribution programs to match the needs of each target segment.
• Measure the performance of each segment and adjust the segmentation approach over time as market conditions change decision making throughout the organization.
There are several ways to segment customers to reach the most relevant ones for your services. Some of the branches of segmentation include geographical, demographic, behavioral and psychographic segmentation.
With geographical segmentation, you can segment a campaign’s target audience by where they are located, whether it is a single street or an entire country. This is particularly helpful for small businesses like a new café that only wants to reach customers in the city they are located in.
Another helpful segmentation is the demographic one where you can segment your consumers based on their characteristics like age, gender, income, education, and occupation. Demographic segmentation is even more efficient when targeting multiple segments at once. Combining various customer segmentation criteria has the potential to reach a very targeted niche market and drive sales while maximizing the value of every marketing dollar spent.
Demographic segmentation can also be used B2B markets. Here, the segments consist of industry, time working at the company and company size. When marketing towards companies it’s common to segment by industry and then further segment by role at the company.
Psychographic segmentation is a lot less obvious since the segments consist of personality, lifestyle, social class, and values. To implement this segmentation, you really must get to know your customers and what makes them tick. Defining one or several personas is key when planning your marketing towards a specific group.
The behavioral segment is dividing consumers into groups such as their liking, knowledge, loyalties and purchase pattern. This means that you can send one message to your loyal customers and a different message to prospects.
COMPANIES USE CUSTOMER
By using several segmentations together, you will create the maximum impact. Customer segmentation is beneficial for all types of businesses, start-ups, and global industries since it will help you reach the customers you want to have a relationship with. Segmentation is the most successful when the message is tailored towards the right audience.
Hanei’s approach begins with having a good understanding of what result our client’s wish to achieve. When we know what we are trying to accomplish our objective will be clear. When the path is obvious, we can identify the customers and segments that are the most relevant for your company and make more of a profit than your competitors. By tying targeted segments and customer insights to economic understanding we drive revenue growth for our clients. Identifying segmentation objectives and focusing on economics, makes us able to work with companies to design and implement segmentation strategies that are custom-made for their needs.
We are a team of independent professionals from diverse backgrounds who want to make consulting simple. We have extensive experience from strategy- and technology consulting firms, start-ups, and corporations, where we have solved problems in 50+ countries – from start-ups to Fortune 500 companies. We are the architects of your growth.