Due to globalization and the digitalization of the world, customers have many options to choose from. Nowadays, customers just want the best for themselves. Thus, it has become more important than ever for brands to understand customer needs and wants. Customer segmentation can help you to understand customers better. You can create targeted campaigns to focus on each specific group with relevant messaging. There are many benefits of customer segmentation that we will discuss below. 

Keep reading this blog to learn more about customer segmentation definition, customer segments, and audience segmentation examples.  

What is customer segmentation? 

 

Customer segmentation meaning is the process of dividing customers based on common attributes so as to target them effectively with personalized messages. You can segment customers based on demographics like age, gender, location, preferences, etc. 

By doing customer segmentation you can build a product user persona. A deep customer segmentation can help you create effective brand messaging and positioning. You can know which product features and benefits to highlight different customer segments. 

A target persona refers to the personification of a specific customer segment of a business. You can create several personas based on distinct customer segments and make your marketing effective.

What is customer segmentation analysis?  

Customer segmentation analysis is the process of analyzing different customer segments in marketing to uncover insights. Most marketers use customer segmentation analysis to determine the type of communication and offers that they should present to specific customer segments. 

For example, an eCommerce brand wants to increase its customer retention. They want to re-target customers who have made purchases in the last 30 days. They need to analyze these customers and find out what type of products they have purchased in the past. 

Doing customer segmentation analysis can help marketers determine the right messaging and the products with which they should target past customers. Customer segmentation analysis can help brands find specific customer segments with higher average order value and predicted future value. 

Brands can choose to target high-value customers that are likely to make purchases and stay loyal. There are many ways customer segmentation analysis can help brands to increase the effectiveness of their marketing efforts. 

Why is customer segmentation important? 

Customer segmentation provides marketers the capability to target customers with personalized messages. Customers prefer those brands that understand their needs, wants, and expectations. Marketing products that your customers want and not the products you want to sell can help you increase accuracy and boost sales. 

The main aim of marketing is to increase awareness and amplify revenue. By making your marketing precise, you can influence customers with the right messaging. You can conduct action-centric customer segmentation and focus on customers with a higher customer lifetime value. 

Increase brand loyalty and customer lifetime value 

Customer segmentation can help you understand customers and make them believe that you care about their needs. Through marketing, you can offer them products that can help them resolve their problems. 

Understanding customers and targeting them with relevant offerings can help you drive brand loyalty. Customer segmentation can help you get insights and spot repeat customers and customers with higher average order value. 

Learning about customers’ purchase behavior can help you allocate marketing resources accordingly. You can identify customers who are making frequent purchases and inform your marketing decisions accordingly. 

Deliver personalized experiences at scale 

As per statistics, 80% of customers are likely to make purchases from a brand that provides personalized experiences. Customer based segmentation can help you segment customers based on their traits and behavior. 

You can create marketing strategies to target specific customer segments based on their needs and wants. You can uncover insights about particular customer segments and focus on them based on their buying journey stage. 

Meet the changing customer needs 

Customer journeys aren’t straight, they are a complete zig-zag as customers interact with multiple touchpoints before converting. Customers’ behavior keeps changing over time and brands need to adapt to these shifts. Brands can’t constantly keep an eye on customers and how their behaviors are changing. 

Customer segmentation software helps to collect new information in real-time. You can create new customer segments and target them accordingly. Customers who made purchases at the end of the season sale might completely differ from customers who made purchases in the last 7 days. 

Understanding customers will help you know the features that make customers choose your brand over and over again. You can use this information to target new customers and drive sales to your business. 

What is a customer segment? 

A customer segment is a group of customers who share similar demographics, characteristics, preferences, and needs. By creating customer segments, you can craft tailored marketing messages and target customers effectively. You can tell them how your products or services can help them resolve their problems or issues. A personalized marketing strategy can help you enhance customer experience and increase brand loyalty. 

Types of customer segmentation 

In this section, we will tell you about the different types of customer segmentation that you can conduct. The type of customer segmentation you choose depends on the business model and how you want to target customers. 

1. Demographic customer segmentation 

 

Demographic segmentation is a type of customer segmentation in which customers are divided on the basis of major life facts. This includes age, gender, income, occupation, marital status, and so on.

For example, a women’s cosmetics brand can create segmentation based on gender to target their products to women. Creating segmentation will help them advertise to the right people and drive sales. 

2. Geographic customer segmentation 

Geographic segmentation refers to the type of customer segmentation in which customers are segmented on the basis of location, city, and country. This segmentation is useful when your business has two or more than two locations. 

Segmenting customers on the basis of their geographic location can help you craft messages that resonate with them. You can create messages in the language they speak and influence them effectively. 

When you tailor brand messaging in the native language, people connect with you immediately. It gives them a sense of amicability and they tend to choose your brand over other brands that use general language. 

3. Psychographic customer segmentation 

Psychographic segmentation is a type of customer segmentation in which audiences are divided on the basis of their values, interests, attitudes, and lifestyles. You can create customer segments in different ways that we have mentioned below. 

For example, if you have an eCommerce store then you can segment customers based on their interests. You can segment sports enthusiast customers and create a segment for customers who buy household items. This way you can target these customers with personalized messages based on their interest. 

4. Behavioral customer segmentation 

Behavioral segmentation meaning is segmenting customers based on their online behavior. This includes considering the products they browse, the products they mostly purchase, and the buying journey stage at which they left, etc. 

You can use behavioral segmentation to reach out customers with the right messaging. For example, an electronic brand that sells mobile phones to customers can cross-sell phone cases to them. Behavioral customer segmentation helps brands target customers based on their behavior. 

5. Technographic customer segmentation 

Technographic customer segmentation refers to segmenting customers based on technology, apps, and devices they use. For example, brands can target customers on the basis of the mobile phone they use, Android or iPhone. 

For example, you can send emails to customers about your new product line if they tend to open emails a lot. For customers who use browsers a lot, you can target them with push notifications and bring them back to your site. 

6. Value-based customer segmentation 

Value-based customer segmentation refers to segmenting customers based on their values. For example, some customers are vegan and they tend to look for products that are cruelty-free. If your brand is eco-friendly and cruelty-free then you can target these customers by promoting your brand values.  

Examples of customer segments  

Now, we will give you examples of customer segments that you can use in your marketing strategy to get better results. 

Demographic customer segmentation 

1. Gender 

Many businesses that offer gender-specific products conduct this type of segmentation. This is a broad type of segmentation and helps them ensure they are targeting the right audience. For example, a women’s perfume brand can segment their customers based on gender to show them retargeting ads on social media. 

2. Age 

Customer segmentation based on age can help brands target specific groups. For example, an adult above 65 years might not have the same interests as a 25-30-year-old individual. Segmenting customers based on age gives you the scope to reach people of the right age group who might need or desire your products. 

3. Occupation 

An occupation of a person tells a lot about their interests and availability. For example, if you have a marketing software brand then you might be interested in targeting individuals who work in the marketing and advertising industry. 

4. Income 

Customer segmentation based on income can give you an idea about how much a person can spend. However, keep in mind that a person can make a purchase beyond their income if they really need a product. 

5. Marital status 

Marital status is a type of customer segmentation conducted if your brand marketing relies on the relationship status of individuals. For example, a matrimonial website needs to advertise to people who are above 21 and unmarried.  

6. Location 

Location is an important factor to consider if you want to personalize your marketing strategy. People who live in different cities or regions have different ideologies and thought processes. Thus, it’s vital to locate your target audience and reach them with relevant messaging. For example, people who stay in Delhi, India need different messaging than people who stay in London, United Kingdom.

7. Language 

For brands to influence customers with their messaging, it’s crucial they speak their language. Communicating in your target audience’s language can help you reach, interact, and engage them easily. For example, if you are targeting people of a particular state then you can use their local language to make them relate with your brand instantly.  

8. Website activity 

Customer segmentation based on website activity refers to grouping customers based on their actions on your website. For example, customers who abandoned their shopping cart on your website can be targeted with free shipping or discount code messages. 

9. Buying journey stage 

Customers who are at different buying journey stages need to be targeted with the right messages. You can’t target customers at the initial stages of the buying journey with conversion stage content. 

10. Last customer interaction 

Before focusing on customers at the last stage of the buying journey, look at their interaction with your brand. If the customer interaction seems positive, then you can target them with a marketing strategy. If the customer interaction is negative then you shouldn’t go ahead with targeting them as they might not be interested. 

Psychographic customer segmentation 

11. Values 

Customer segmentation based on values is difficult as this information is not easily available like gender and age. You can learn about customer values through what they search for, interviews, or surveys. 

You can use this information to target customers and help them achieve their goals. When your brand values align with customer values, they tend to convert easily. You should identify and focus on customers whose values are similar to those of your brand. 

12. Interests

Interests refer to the things that your target customers enjoy doing and may or may not relate to your brand. For example, your customers are sports enthusiasts and your brand sells protein shakes. Then, you can partner with a sports company to create cross-promotional campaigns. 

13. Personality 

A customer’s personality can tell you about their interests. For example, an extrovert person might be interested in outdoor activities whereas an introvert person might be interested in indoor activities. 

You can divide your target audience based on their personality like outgoing, extrovert, serious, introvert, and so on. You can create marketing strategies to target customers based on their personality. 

Technographic customer segmentation 

14. Device type

You can do customer segmentation on the basis of device type. This will help you know the devices they’re using to access your website. For example, from analytics, you find out that 80% of people visit your website from smartphones. This information can help you to focus on making your website mobile-friendly. 

15. Browser type 

Customer segmentation based on browser type can help you know which browsers your customers are using. This information can help you to run advertisements on the browsers where your customers are most active. 

Value-based customer segmentation 

16. Customer satisfaction score 

CSAT and NPS scores can help you determine the satisfaction level of customers with your brand. A higher score indicates that customers are happy with your brand while a low score indicates customers aren’t happy with your brand. 

Customer segmentation into promoters and detractors can help you identify your most loyal customers. You can reach out to unhappy customers and take feedback about what led to their dissatisfaction.  

17. Number of purchases 

The number of purchases a customer makes helps in determining their value to your business. The more purchases a customer makes the higher their value to your business. Doing customer segmentation based on the number of purchases can help you determine your high-value customers. 

18. Average order value

The average order value is the average amount a customer spends on your business when they make a purchase. You should retarget customers with a higher average order value to boost your revenue. 

19. Product attributes 

Some customers look for specific product attributes before buying them. For example, some customers are specifically looking for vegan food items while some are looking for healthy options. You can create customer segments based on product attributes and target them with tailored messaging.

20. Delivery method 

Sometimes, customers have certain delivery requirements like they want the product to be delivered earlier. Customer segmentation enables you to segment customers based on their shipping and delivery needs. 

How to create a customer segmentation strategy? 

A customer segmentation strategy will help you use customer segments in your marketing strategy effectively. In this section, we will give you a step-by-step guide on how to create a customer segmentation strategy. 

 

1. Decide your customer segmentation goals 

A customer segmentation strategy should align with your business goals. First, have a look at your business goal and decide who are your target audience. Organize your customer base and determine the common characteristics to segment them. 

Create buyer personas for major customer segments in your customer base. Customer segmentation helps you understand the specific needs and wants of your customer segment. By making buyer personas you can make it easy for your teams to communicate about them. 

Then, you can research in detail about these buyer personas and find information for your business like:

Gathering this information will help you create a personalized marketing strategy for distinct customer segments. You can reach out to customers with the right messaging that entices them to complete a purchase. 

2. Prioritize customer segmentation goals 

Once you have a clear understanding of your customer segmentation goals, it’s time to prioritize. A large business can have a wide customer base to reach out to and communicate. Often, it can become overwhelming for a marketing team to craft messages and create the right marketing strategy. 

To begin making a marketing strategy for different customer segments, you should look at different aspects. You should determine high-value customers and the customer segment that drives the highest revenue to your business. Find out which customer segment has maximum loyal customers. 

Collecting important information about your target audience will help you prioritize the right customer segments. You can organize your customer data and determine the customer segments to target first who are likely to convert. 

3. Create customer segments based on business requirements 

It’s not necessary to have a lot of information to create customer segments. You can do customer segmentation with available information like geographic locations where you serve. You can also use automation software powered by machine learning to build audience segments. 

However, make sure that you don’t get too narrow in creating customer segments. Many customer segments mean you need to create many marketing messages. Try to make sizable customer segments so it can save you time. 

Try to create customer segments that make sense to your business. For example, you have an online pet store for cats, dogs, and fishes. You can create customer segments for dog owners, cat owners, and fish keepers. This way you can create and target these groups with messages that are relevant to them. 

4. Target and market to your customer segments 

As per statistics, customer segmentation can help businesses increase their conversion rate by up to 50%. By targeting customers with personalized messaging, you can enhance customer experience and lead them to the end of the funnel. 

From customer segment information, you can decide the type of content, images, and messages to create. You need to make customers feel that you understand them. Try to target customers with personalized messages that show them how your products or services align with their goals.

Customer segmentation software 

Customer segmentation software can aid you in creating customer segments easily. Here, we have given a list of top customer segmentation software for your reference. 

1. WebMaxy eGrowth 

 

WebMaxy eGrowth is an advanced customer data platform that can help you create customer segments easily. You can organize, maintain, and analyze all your customer data and interactions in one place. 

Create customer segments on the basis of demographics, purchase behavior, and recent activity.  Build marketing workflows to focus on these customers with personalized messaging. You can use these segments directly in SMS, Email, and WhatsApp marketing.

There are many other features in WebMaxy eGrowth such as a KPI dashboard, marketing insights, social campaigns, omnichannel support, customer loyalty, and retargeting. eGrowth can help you enhance customer journey and engage with them effectively. 

Schedule a call with our experts to learn more about WebMaxy eGrowth and its features, or email us at [email protected].  

2. Mailchimp 

 

Mailchimp is an email marketing automation software that comes with a customer segmentation tool. You can organize, manage, and segment your contacts and target them with personalized emails. 

You can create tailored messages for each customer segment. By understanding customers better, you can craft messages that exhibit how your products or services can help them. 

3. HubSpot 

 

HubSpot is a CRM software that can help segment your audience with active and static contact lists. The best segmentation feature of this software is event-based segmentation. You can use event-based segmentation to locate and inform customers at one location. 

HubSpot also offers many different types of tools like marketing hub, CMS, sales hub, and service hub. There are segmentation features within these tools as well. 

4. Userpilot 

 

Userpilot comes with advanced segmentation options that help you segment customers based on their journey stage and product usage analytics. You can create customer segments and use them in your marketing strategy. 

This software comes with an A/B testing feature that enables you to make data-driven decisions. It is code-free and easy to integrate with your current data stack. The pricing is on the higher end which makes it accessible for mid and large-sized enterprises. 

5. Segment  

 

Segment is a customer segmentation tool that helps to collect and manage customer data from mobile and web apps. You can get all your customer data in one place and create custom groups. 

The best feature of Segment is that it tracks every event and provides daily app reporting. However, many app integrations make it complicated to manage. The pricing plan of the Segment is also quite expensive. 

Customer segmentation: Wrapping it up 

Customer segmentation is the best way to start personalization strategies. Customer segmentation can help you group customers based on their characteristics, preferences, and behavior. You can create marketing messages that best resonate with specific customer segments and drive engagement. You can curate content and images that entice them to convert into paying customers. 

WebMaxy eGrowth can help you organize, manage, and analyze customer data easily. You can segment your target audience based on demographics, geographic, and behavioral traits. You can use these consumer segments in your marketing campaigns. This way you can target customers with the right messages based on their requirements. 

There are many features in WebMaxy eGrowth such as a KPI dashboard, marketing workflow, marketing insights, social campaign, WhatsApp commerce, omnichannel support, customer loyalty, and retargeting. 

Customer segmentation FAQs

What is customer segmentation?

Customer segmentation refers to the process of grouping customers on the basis of their common characteristics such as demographics, interests, preferences, and behaviors. Customer segmentation can help you make your marketing relevant to customers and increase sales. There are many customer segmentation software that can help you create customer segments such as WebMaxy eGrowth, Mailchimp, HubSpot, Amplitude, Segment, etc.

Why is customer segmentation important?

Customer segmentation is important as it can help you target the right audience, deliver relevant messages, and increase overall revenue. Customer segmentation helps you better understand customers and tailor the most effective messages. You can find out who your high-value customers are and direct your marketing efforts toward them.

How to do customer segmentation?

You can do customer segmentation with the help of WebMaxy eGrowth. To start you just need to integrate your Shopify, WooCommerce, or Magento store with eGrowth. From there you’ll get complete information about your customers. Then, you can conduct customer segmentation based on demographics, purchase behavior, and recent purchases.

What is customer segmentation analysis?

Customer segmentation analysis refers to the process of analyzing customer segments to discover valuable insights about them. Many marketers and brands do customer segmentation analysis to create personalized marketing campaigns and offerings to target high-value customers.

What is customer segmentation strategy?

A customer segmentation strategy can help you target different customer segments with precise marketing efforts. You can create a customer segmentation strategy by following the steps given below:

– Set customer segmentation goals 

– Prioritize customer segmentation goals 

– Create customer segments based on business requirements 

– Target and market to your customer segments 

What are the benefits of customer segmentation?

Customer segmentation is the process of segmenting customers based on their common characteristics. There are many benefits of customer segmentation that we have mentioned below:

– Enhances customer experience

– Improves customer relationship

– Increases customer retention 

– Helps identify new markets 

What are the 4 types of customer segmentation?

Customer segmentation refers to the process of segmenting customers based on their common traits. Here, we have listed the types of customer segmentation:

– Demographic segmentation 

– Geographic segmentation 

– Behavioral segmentation 

– Psychographic segmentation  

– Technographic segmentation 

– Value-based segmentation