Over time customer segmentation has solely been seen as a marketing strategy, but recent studies and research have shown that it also can be used to improve customer experience. Humans are unique social beings who like to belong to groups with common values or interests, and for anyone to connect to a group of people they must have things in common to offer, the same applies to your customers. To build great relationships with them, you must tailor your support to suit specific customers. Segmenting your customers and consistently delivering relevant offers will help you to create a better customer experience. A customer who receives personalised care from you is likely to go on re-visiting you for similar services in the future. Keeping them happy and loyal will help you retain them as repeat customers.
Customer segmentation is a technique that identifies and categorises various target markets based on some common characteristics. For example, an individual who lives alone might be categorized as a single consumer while someone who lives with their spouse would be considered a couple. Each segment will be targeted with a personalized marketing plan, and you will use customer acquisition cost analysis to monitor your return on investment. Segmenting your customers in this way will help you to understand their needs and cater to those specific needs instead of giving them the same service or product as everyone else. This will result in better customer experiences from you and also bring in more business from people who would not have otherwise bought from you.


The Importance Of Customer Segmentation

Customer segregation is important for businesses because it helps them understand their customer’s needs in order to deliver a better customer experience. It also helps businesses identify how much it costs them to acquire new customers and how much they are spending on their current ones, which can help them make better business decisions about pricing, product development, and marketing.
A big advantage of customer segmentation is that new products or services can be developed specifically for certain segments by understanding what they want or need. For example, one segment may need a steaming service while another may require a print service. This type of customization allows your company to have an edge over the competition by offering tailored products and services that are not available anywhere else.

The goal of customer segregation is to keep your customers happy and loyal by giving them personalised care. This has been proven to increase repeat business as well. It also helps to identify what your customers want so that you can deliver it to them quickly, easily, or with fewer errors. This will help you figure out how best to serve your customers and improve their experience.


How To Segment Your Customers

To segment your customers, you need a good data management system that captures and stores relevant information about them. With this information you can segment customers based on the following models of segmentation;

Demographics: This groups your customers by gender, age, income, education, marital status, or geographic location. It would likely be broad but can also be narrowed down to be more specific, for example, people who have lived in a certain location in the past. Demographics help a lot when it comes to communication with your customers as it provides information on the most preferred channel, language, pattern, or tone of conversations with them. An example is segmenting by age, this can help your support agents select the most suitable channel and tone of communication with the different age groups. For older people, emails or calls with a formal tone, and for the younger fellows, social media with a casual tone.

Interests: In this case, data collection alone is not enough as it requires you to know your Unique Selling Proposition (USP). If you discover what it is about the business that differentiates you from others, then you are creating a customer base that cares about what you’re doing. Knowing the interests of your customers can help with selecting the right type of marketing strategy for your business. For example, if you are selling sports shoes and some segments of your customers enjoy watching track and field events while others prefer watching dance shows, then leveraging on these different types of events might attract different customers at different times which could lead to increased sales during those events.

Values: Your customer base will want to stay loyal if they share similar values your company does. Tailor your customer experiences in such a way that conveys the same values your customer believes in. For example, knowing that certain customers are big on simplicity gives you a heads up on how to handle them well.

Decide which segmentation model suits your business. Once you identify these segments, consider how the information can help strengthen your business strategy and serve your business holistically. This would give you clear OKRs to measure KPIs in building a solid relationship with your customers. Get your hands on software to ease the process of data management and most importantly, make this newfound strategy a culture that is not stagnant but is refined with time and the latest trends.