What is customer segmentation

Customer segmentation

What is customer segmentation?

In times of increasing competitive pressure, companies have to develop new sales strategies in order to hold their own against competitors in the long term. Intelligent advertising plays a central role here. It's no longer about aggressively marketing your own products, but rather those Interests and wishes of the customer to put in focus. The Customer segmentation is a handy marketing tool that lets you Address customers individually to let. With their help, different needs can be specifically addressed.

Why is customer segmentation important?

Every person is unique and wants to be treated individually as a customer. He no longer only decides on the best price - but increasingly also on the provider who optimally caters to his needs. Of course, a company cannot know every (potential) customer personally. However, some customers have similar preferences, desires and behaviors - and therefore react similarly to a marketing offer. By being a company People with the same or similar characteristics in a group summarized and served in the same way, it can targeted, cost effective advertising play off. At the same time, the customer has the impression that the company responds to them individually and that their wishes are the focus.

What is a customer segment?

Using customer segmentation to become Customers with similar interests and behaviors identified and summarized in a group (customer segment). Companies orientate themselves on questions such as:

  • Who are my clients?
  • What are your needs?
  • Which products do you prefer?
  • How do you behave before, during and after the purchase?

Using these criteria, customers from a broad, heterogeneous crowd can be classified in small,homogeneous customer segments subdivide and address specifically. As a result, whole groups with similar preferences are not processed. In this way you can Place marketing campaigns better, higher heels achieve and Save advertising costs - especiallyProactive avoidance of wastage become.

How does customer segmentation work?

The basic requirement for a success-oriented customer segmentation is detailed market research. Before optimizing the marketing strategy, data must first be collected and evaluated. It is important to find out what interests customers, what their needs are and which criteria influence their purchase decision. This works best through an active dialogue with the target group. Based on the findings, Divide customers with similar characteristics into customer segments (e.g. according to product preferences and purchasing behavior, but also according to age, gender, location, etc.). The more carefully the customer segments are created and maintained, the more positive the customer segmentation has on marketing. Ideally, not only can Save time and money, rather Automate entire advertising campaigns.

What types of customer segmentation are there?

Customer segmentation is very complex and differs from company to company. A generally applicable group classification is therefore not possible. As in many areas of marketing, what matters most is the offer and orientation of the company in question. As expected, a global group has more (and larger) customer segments than a regionally active, medium-sized company. In addition, between the one-dimensional and the multi-dimensional customer segmentation differentiated:

1. One-dimensional customer segmentation

One-dimensional customer segmentation does not result in homogeneous, but rather heterogeneous customer segments. The people within a group can have similar characteristics, but they can also differ in many ways. This “rough” type of customer segmentation is particularly worthwhile if companies want to quickly grasp their target group structure.

2. Multi-dimensional customer segmentation

While the one-dimensional customer segmentation only differentiates according to one characteristic, several factors are taken into account in the multi-dimensional customer segmentation. This creates differentiated customer groups that clearly distinguish themselves from other customer segments. In this way, meaningful customer profiles can be recorded and usable samples can be worked out.

Customer segmentation Examples: Which group classification makes sense?

In order to divide into different customer segments, it is important to know which characteristics are typical for a customer segment. A vehicle rental company will set up its customer segmentation completely differently than a cosmetics shop. In particular, there are major differences between private and business customers with regard to customer segmentation: While the term “business customer” encompasses several individuals within a company, private customers generally refer to the individual end user. The various options for customer segmentation are, for example:

Customer segmentation according to B2B

  • Organization-related customer segmentation (according to orientation, company structure, etc.)
  • Environmental customer segmentation (according to industry, technological status, association membership, etc.)
  • Individual customer segmentation (according to order volume, procurement policy, willingness to take risks, etc.)

Customer segmentation according to B2C

  • Sociodemographic customer segmentation (according to age, gender, occupation, etc.)
  • Psychographic customer segmentation (ethical values, religious affiliation, motivations, individual lifestyle, etc.)
  • Behavioral customer segmentation (according to activity, media usage, turnover, etc.)
  • Geographic customer segmentation (according to place of residence / spatial distribution)

What are the advantages of customer segmentation?

Based on customer segmentation, companies are able to achieve the To work out differences between existing and potential customers and your Extensive optimization of the marketing strategy. This enables them to better approach individual groups and offer them products and / or services that are precisely tailored to their needs. Key benefits of customer segmentation include:

  • Overview of existing customer bases
  • Optimizing the user experience
  • Customer loyalty
  • Targeted placement of marketing campaigns
  • Avoidance of wastage
  • Lower advertising costs.

Conclusion: customer segmentation as a solution for cost-effective, personalized advertising

Nowadays the customer is no longer impressed by run-of-the-mill advertising. Instead, he expects Product suggestions that are precisely tailored to his needs are. Thanks to customer segmentation, companies meet this requirement. Whether it's a personalized e-mail newsletter or a customized advertisement: customer segmentation is an effective marketing strategy that not only saves time and resources, but also ensures a positive user experience. Customer segmentation thus represents the perfect middle between cost-effective and personalized advertising.