Understand Customer Segmentation : Basics and Types

07 July

Customer Segmentation allows you to tailor your advertising campaigns and target the niche on the basis of specific characteristics of the group. This strategy of focusing smaller groups can be proved to be a powerful tool to boost results than following humongous leads with same and repeated content over time. The major drive behind customer segmentation is not limited to effective targeting but also to evaluate and analyse the impact of conducted campaigns in a smart and intelligent manner.

To be useful segments must be measurable, substantial, accessible, differentiable and accountable.

By Philip Kotler

In order to perform an ideal market segment, the following basics need to be followed and effective planning is needed before working any segment into action. Below is what you need to shape the customer segments successful :

measurable: the segment should be measurable using realistic and accessible parameters
profitable: the segment should able to serve the end result of high sales numbers and profit
stable: the volumes of participants should not vary drastically with the change in time
accessible: the segmented should be accessible with available marketing strategies, activities and tools
cost-effective: the constituents of the segment and its relationship should bear cost-effective nature
static: the preferences shared by the segment should be uniform in nature
responsive: the segment should be receptive to applied actions
sample size: the number should always be handy enough to make a segment an overall success

There can be more considerations to make accountable for practical and performing segments as per the requirements. There exists a correlation between an understanding of the segment - the business is good at it and the one it wants to target. One can easily strive the journey by careful study of the basics of market segmentation, not loathing it with redundant and irrelevant variables and setting the target right.

Let's explore the ways in which the market can be broadly segmented:

By geography: Segmenting your target markets based on their location is a great tool. You can break up your markets whether they’re global, national, regional or simply local. It all depends on the products and services you offer because based on your business there will be a logical segment for you to target.
By behaviour: You can identify and connect with the customers on the basis of their hobbies, activities, lifestyle, interests and opinions they share and turn them into brand loyal, and long term customers.
By demographics: Demographics are a great way to differentiate between your customer base. You can segment markets by many different characteristics, such as age, income, gender, race and so on. Rather, it is a basic building block of market segmentation analysis.
By deliverables: The type of industry you are associated with and the kind of product or service you have on your sleeves is another way to further narrow down your segments. Although, this remains a very broad category to work upon. It can be complemented with other ways to get better results.

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Richa Raj

Clicknurture.com Team

07 July 2020