Blog 78: What are the different types of customer segmentation?
- Idea2Product2Business Team
- Jul 26, 2024
- 3 min read
Every customer is unique. With customer segmentation we can group existing and potential customers based on shared characteristics. Due to which we can reach different sections of our customers at the right time and with the right information (also refer to blog 14: User personas to understand our target users). Prior to segmenting our customers, we need to identify our target audience (refer to blog 77: How to identify our target market?).
Popular types of customer segmentation
1. Demographic segmentation groups customers according to shared characteristics, such as gender, age, marital status, educational level, occupation, household income and location.
For example,
Age: This will help us understand their preferences, the different channels or touch points they are likely to use etc.
Occupation: This will give us an idea of our customer income, their budgets etc.
2. Geographic Segmentation groups customers according to geography which includes preferred languages, location.
For example,
Preferred language: Knowing this will help us to communicate better with them.
Location: Knowing this will help us adopt the appropriate marketing approach.
Transportation: Knowing how customers commute will help us determine the appropriate mode of transport on which our ads are to be displayed on.
3. Psychographic Segmentation groups customers according to customer interests, values, and personality traits.
For example,
Interests: These are the things, such as sports, games, pets, and activities, that customers enjoy. We can direct our ads towards their areas of interest or collaborate with relevant institutions.
Personality traits: Segment customers based on their personality traits. Doing this will help us market to them in a way they can better relate to and respond.
4. Behavioural Segmentation groups customers according to purchase history, response to marketing campaigns, product usage patterns etc.
For example,
Website activity: Track customer activities such as the pages they interact with the most.
E-commerce activity: Identify the products they’ve purchased or the ones they’ve seen but are yet to purchase - abandoned carts etc.
Frequency of purchases: High number of purchases coupled with high customer lifetime value. We will need to recognise these customers and consider rewarding them with exclusive offers.
Recent customer engagement: Insight into a customer’s most recent interaction will guide us on what to do next.
Refer blog 92 for more on crafting a personalised experience using behavioural segmentation.
5. Needs-based Segmentation groups customers according to their must-have requirements in a product.
For example,
Product features: Some customers have certain requirements or buy products because of specific features they have.
Service needs: For some, it is in how we interact with them, such as your smooth onboarding process, effective customer service or prompt deliveries.
Delivery method: Customers have specific needs, such as how and when we deliver our products. Hence, we categorize individuals according to their specific shipping needs.
6. Technographic Segmentation groups customers according to their use of devices, applications, and software.
For example,
Device type: If most of our customers visit from their phones, we need to consider introducing a mobile app and ensure our site is mobile-responsive.
Browser type: Customers use various browser types, including Google Chrome, Mozilla Firefox, and Safari. Test content to ensure they display properly on these browsers.
Original source: Customers can find us via social media, search engines or even referrals. We need to know how they discover our product so that we can optimize the conversion path.
Jump to blog 100 to refer to the overall product management mind map.
Source:
All the best! 😊