Emily Clarke

Why Customer Segmentation is Important For Your Company to Succeed

Customers come in all different types and from lots of different backgrounds. While your business may have one type of customer that is more common than another, the truth is that virtually anyone can visit your brand's website to make a purchase or walk through your business's front door to buy a product.

Because you want to ensure that you're able to meet the needs of every potential customer, you need to know everything you can about the customer journey across various segments of customers. Customer segmentation is the name for this process, and it involves breaking down your customer base and prospect list into different categories.

What Categories Are Used in Customer Segmentation?

How you choose to segment your customers and prospects is up to you, as each business will have different needs. However, some common segmentation techniques include breaking down customers into groups by geographic location, demographic identity, individual preferences, and current and lifetime value assigned to a customer's purchasing behaviors.

This last segment can be thought of as a person's potential for future business. If someone has made lots of purchases with your company over many years, you might consider that person to have a higher value than someone who made a single purchase three years ago. This is not a value judgment of the person as a human being. Instead, it is the assigning of value to that person's potential for generating future revenue for your business.

What Tools Can Be Used to Segment Customers?

Although the idea of segmentation is fairly simple, the implementation of this practice can be quite complicated. For this reason, many business owners will deploy user segmentation software to create segmented groups. User segmentation software automates the process of dividing customers and leads based on the information your business enters and information supplied by customers or leads.

This data is then compared against the parameters your business sets up in the software. Some applications use artificial intelligence to identify key data points across customer information that can intelligently place the customer in the right segment or even display weighted data across multiple segments.

Author Resource:-

Emily Clarke writes about customer messaging and engagement solutions including SMS services and mobile notifications tools. You can find her thoughts at customer engagement blog.