What is customer segmentation and how can it help you generate more sales, get more customers, and provide a better experience for each of your clients? In this blog post, I’ll walk you through all the answers. <\/p>\n\n\n\n\n\n
What is customer segmentation?<\/h2>\n\n\n\n
Let’s start with a pinch of theory. According to the Macmillan Dictionary<\/a>, the word ‘segmentation<\/em>‘ denotes “the process of dividing something into segments or being divided into segments<\/em>” according to similar characteristics. To that end, customer segmentation definition (aka market segmentation<\/a>) implies splitting people in your client base into groups based on such common criteria as, for instance, personalities, hobbies, buying behavior, job titles, or interests they share. Just like we did with the shapes below:<\/p>\n\n\n\n With a range of competitors available in the market, customer segmentation gives you a perfect opportunity to stand out from the crowd. You can easily find the right messaging that will make your clients knock at your door time and time again. <\/p>\n\n\n\n If you want to realize how customer segments work and implement them into your workflow, answer the following pivotal questions (they are the base of customer segmentation):<\/p>\n\n\n\n Before we set the ball rolling, there are a few customer segmentation mistakes we want you to be aware of (make sure you’re not making them in your future activities):<\/p>\n\n\n\n To provide you with a starting point for organizing your customers into matching groups, let’s discuss 6 main types of customer segmentation:<\/p>\n\n\n\n Demographic segmentation might be the first one to think about when it comes to dividing customers into groups. It breaks down the market based on such criteria as:<\/p>\n\n\n\n For instance, you’re the owner of an online cosmetic shop. Your store features all the things people might need. Sure thing, different age groups would prefer different face creams, facial masks, lipsticks, whatever. Therefore, you can segment your customers on the basis of their age. You can create a tailored customer engagement strategy<\/a> later on.<\/p>\n\n\n\n Segmenting customers by demographics saves time and prevents you from selling unnecessary products to potential clients. You can also modify your product or service in less time to suit people’s needs better. Besides, targeting specific audiences can help you make customers happy<\/a>. In other words, clients get just the things they want and you don’t provide them with unnecessary info. <\/p>\n\n\n\n There are also minor drawbacks. Demographic data changes rapidly year after year, so it’s important to move up with the times (and people can lie about their age). What’s more, such a metric has a descriptive manner: you can’t understand the consumer completely. <\/p>\n\n\n\n As you can guess, creating customer segments by geographical principle means that you find out their location: country, state, city, town, IP address, climate. Some industries may also divide their clients based on rural, urban, or suburban areas. <\/p>\n\n\n\n The UK clothing company Superdry<\/a> sells T-shirts and swimwear in India in November, while the UK citizens can purchase coats and blazers at the same time. Practically, a brand can offer various products to different people according to their weather conditions. <\/p>\n\n\n\n The absolute advantage of geographic segmentation is that you can easily identify the needs of potential clients and process them accordingly owing to well-defined borders, topography, etc. What’s more, densely populated areas often bring in a massive market potential which, in turn, leads to increased profits. <\/p>\n\n\n\n However, geographic segmentation can be tricky as you may somehow predict the weather but you can’t be dead sure whether it keeps on changing. Plus, you lack information on the buying behavior since people living on the same territory may have various preferences.<\/p>\n\n\n\n As the name suggests, this type of customer segment involves people depending on their behavioral patterns as they interact with a brand: the number of sessions with your website, time spent on a website, URLs visited, exit intent, and more. By having all this data, you can craft your message properly:<\/p>\n\n\n\n First-time visitor: <\/strong>Hi there! Learn about our special offers right now!<\/em><\/p>\n\n\n\n Returning visitor: <\/strong>Hello again! Join our loyalty program to start saving!<\/em><\/p>\n\n\n\n The main goal here is to address the special desires of a customer group and tailor a product or service to put them into action. Behavioral customer segmentation’s criteria are as follows:<\/p>\n\n\n\n This customer segmentation type helps sales and marketing teams align as both of them have a focus on closing the deal. <\/p>\n\n\n\n By the way, it’s predicted that by 2025, 25%<\/a> of marketing departments will have behavioral scientists as part of their full-time staff. <\/p>\n\n\n\n Splitting customers into groups by a psychographic segmentation<\/a> means that you take their lifestyle, beliefs, traits, social class, and interests into account. Unlike demographic or behavioral data, psychographic segmentation answers the question of Why <\/strong>a person buys a product. <\/p>\n\n\n\n Let’s say a textile company designs clothes for a variety of market sections, such as athletes, students, office workers, etc. They can divide these people into groups according to their lifestyle as an athlete wants to wear gym clothes and an office worker prefers a formal style. This way, all the needs will be catered to properly. <\/p>\n\n\n\n Another great example of a company that fully embraces psychographic is Apple. The recent Apple Event<\/a> has given me the idea that this technological mammoth always focuses on personality, identity, and creativity. For instance, a brand-new iWatch is all about health: it features blood oxygen level, health rate, and so much more. It can even show the height when you’re hiking. A well-thought-out customer persona<\/a> (aka buyer persona) is your perfect chance to build excellent marketing campaigns for the right groups of clients. With its help, you can understand the audience<\/a> and speak to them effectively. <\/p>\n\n\n\n Though persona segmentation takes time to produce and requires multiple data, its advantages come down to:<\/p>\n\n\n\n This type of customer segmentation is connected to the economic value of specific customer groups. To put it simply, it’s all about how much a person is willing to pay for your products. <\/p>\n\n\n\n To perform value-based customer segmentation, you can just look at previous data such as how many purchases are made, how often, and what the value of those purchases is. <\/p>\n\n\n\n Now that we’ve covered the basics, let’s talk about the importance of customer segmentation. If done right, it can help your business skyrocket. <\/p>\n\n\n\n\n\n As Peter F. Drucker, an American management consultant, once stated, ‘the aim of marketing is to know and understand the customer so well the product or service fits him and sells itself<\/em>‘. And his quote is directly connected to what we’re talking about today. <\/p>\n\n\n\n Without big data<\/a>, you can’t see the full picture. The recent research<\/a> shows that customer segmentation is a top-of-mind priority for many executives. 72% <\/strong>of business owners claim that they are using the data to always stay in the know and alter their marketing efforts if need be. <\/p>\n\n\n\n To better perceive the power of customer segmentation, have a closer look at the things you can benefit from:<\/p>\n\n\n\n You can enjoy all of these benefits if you invest a little bit of your time and effort into segmenting customers the right way. Come to think of it, you can do that using your HelpCrunch account hands down. Go for the details below!<\/p>\n\n\n\n With HelpCrunch, you can create a variety of customer segments in a snap. For that, go to your HelpCrunch account and find the Contacts<\/strong> section. In the advanced search dashboard on your left, you can Add criteria<\/strong>.<\/p>\n\n\n\n The criteria available are browser language, email, and country, to name just a few. Plus, you can always add custom data<\/a> to better segment your customers. After you choose the criteria, hit the Save<\/strong> button (it’s a small disk sign).<\/p>\n\n\n\n Customer segments can save you much time while creating auto or manual messages. Just load a proper segment, there’s no need to set everything up over and over again. <\/p>\n\n\n\n Customer segmentation helps you boost conversions, reach the right audience, and interact with customers more effectively to meet their needs. But it actually has one more goal: to minimize your guesswork. A one-size-fits-all approach doesn’t work here, so you just need to harvest data to understand each of your customers. If you want to take your customer engagement<\/a> to the next level, segmentation is just the thing. <\/p>\n\n\n\n We use this feature every time and it streamlines our workflow significantly. Sign up<\/a> for HelpCrunch and start segmenting your customers to engage with them even better. <\/p>\n","protected":false},"excerpt":{"rendered":"![\"what](\"https:\/\/helpcrunch.com\/blog\/wp-content\/uploads\/2020\/09\/customer-segmentation-essense.png\")
<\/figure><\/div>\n\n\n\nWhat are the main types of customer segments?<\/h2>\n\n\n\n
1. Demographic segmentation<\/h3>\n\n\n\n
![\"demographic](\"https:\/\/helpcrunch.com\/blog\/wp-content\/uploads\/2020\/09\/demographic-segmentation-factors.png\")
2. Geographic segmentation<\/h3>\n\n\n\n
3. Behavioral segmentation<\/h3>\n\n\n\n
4. Psychographic segmentation<\/h3>\n\n\n\n
![\"psychographic](\"https:\/\/helpcrunch.com\/blog\/wp-content\/uploads\/2020\/09\/demographics-vs-psychographics.png\")
You might think that it’s impossible to monitor psychographic data through the Internet. But that’s wrong. You can utilize such tools as Facebook Pixel<\/a> or Brandwatch<\/a> and see what your customers share and view online.<\/p>\n\n\n\n5. Persona segmentation<\/h3>\n\n\n\n
![\"what](\"https:\/\/helpcrunch.com\/blog\/wp-content\/uploads\/2020\/09\/buyer-persona-explained.png\")
6. Value-based segmentation<\/h3>\n\n\n\n
Why customer segmentation matters?<\/h2>\n\n\n\n
How to segment customers with HelpCrunch? <\/h2>\n\n\n\n
![\"customer](\"https:\/\/helpcrunch.com\/blog\/wp-content\/uploads\/2020\/09\/customer-segmentation.png\")
<\/figure><\/div>\n\n\n\n![\"new](\"https:\/\/helpcrunch.com\/blog\/wp-content\/uploads\/2020\/09\/new-mm-customer-segments-.png\")
<\/figure><\/div>\n\n\n\nBottom Line<\/h2>\n\n\n\n