How to Segment Your Customers to Grow Revenue

While you can’t reach out to each customer individually, it’s nice when you can get as close as possible. The


Kristin Savage

April 11, 2019

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While you can’t reach out to each customer individually, it’s nice when you can get as close as possible. The problem is that it’s challenging. You want to provide great customer experiences to every possible customer group, but that’s difficult to do, even with a relatively small organization. Customer segmentation is the solution you need.

Defining customer segments

Customer segmentation is the practice of creating separate target customer groups in order to provide customers with personalized content, website, user experiences, and other marketing techniques. The idea is that customers who have certain traits in common will respond best when companies reach out to them in ways that are relevant to them.

Once a business defines the customer segments it will target, it often creates customer personas. These are essentially character profiles of a customer who has the traits of a specific customer segment.

Criteria for segmenting customers

The idea behind segmenting customers is to divide them up by the criteria they have in common. Before you can do that, you have to determine what criteria you’ll use. Here are some of the more common criteria used:

  • Geographic data: where your customers live and work can have a pretty big impact. Location can impact language, values, traditions, interests, and needs.

  • Demographic information: this is probably the most common criteria used to segment customer groups. It includes data such as age, marital status, gender identity, sexual orientation, income, marital status, education, and employment.

  • Behavioral information: this criterion is related to common customer behaviors as related to your products or services. It includes ways in which your products and services are used, purchase history, points of frustration, and expectations.

  • Psychographic data: this criterion includes lifestyle, belief systems, personality traits, membership in cultural or social groups, and values.

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Why it’s so important to segment your customers

The primary reason all of this is so important is that it’s an expectation. As more companies focus on content personalization based on various customer criteria, audiences become more accustomed to this approach. Also relevant to the issue, 74% of customers feel frustrated when the website content they encounter isn’t personalized.

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By segmenting customers, not only can you meet and exceed their expectations, you can position yourself to be more competitive. You’ll be able to focus on the specific needs of each customer group, do a better job than your competitors of anticipating what each customer group needs, and act quickly when an opportunity arises to really impress members of a given segment.

Segmenting your customers also requires that you get to know them. That goes a long way towards building better relationships. The data you gather and analyze to create your segments can help ensure that you are very cognizant of your audience’s needs. This information can be used to improve your products and services, even improve your customer service procedures.

Finally, customer segmentation is the first step in developing marketing and advertising campaigns that target specific customer groups. The more you create marketing content that targets a specific customer group, the more effective it will be.

Without segmentation, you are forced to engage in what is frequently called “spray and pray” marketing. All of your marketing efforts are done with a ‘general audience’ in mind. By trying to meet everyone’s needs at once, you often meet the needs of nobody very well at all.

Examples of customer personas

A customer persona is a character profile of someone who meets the criteria of one of your customer segments. Imagine that one of your customer personas is a single, female, college student, who is into gaming, is into environmental causes, lives in Central America, and frequents nightclubs. To really dial that in, you might create a persona like this:

Darla attends the University of Kentucky, majoring in Sociology. She dates casually but is not in a relationship. She regularly donates money to Greenpeace. She has never purchased your products before but has put items in your shopping cart. Most evenings, she stays home playing video games online. When she goes out, she heads to the local club to hear EDM.

It may seem excessive to create personas that are this detailed. However, this is a popular technique, because humanizing each customer segment can help marketers, and content creators really focus in on the segment they are trying to address.

Personalizing content based on customer segments

Once you’ve chosen your criteria for segmenting your customers and developed customer personas, it’s time to put that to use. The way to do that is to create content, and provide users with online experiences that give them more “wow moments.” To do this, you create content that is made specifically for each segment. That content can be shared through your:

  • Webpages 

  • Videos

  • Social media channels

  • Paid advertising

  • Email marketing

In the case of marketing to people who closely match the customer persona “Darla,” you can provide her with a customized website experience with a personalized front page for first-time customers, send her marketing emails regarding items in her shopping cart.

By doing these things, you increase brand loyalty, make the customer journey easier for her, and ensure that the content she sees is as relevant as can be.

Potential pitfalls

As with anything else, there are potential drawbacks to this. If you make one of these mistakes, you may need to revisit your customer segments. These mistakes include:

  • Choosing the wrong criteria for your segments. For example, if gender doesn’t really impact the way your customers use your products or engage with your brand, it may not be helpful to segment customers that way.

  • Targeting segments that aren’t profitable. It doesn’t make sense to create a customer persona, then market to it if people who match that profile simply aren’t going to spend their money on your products.

  • Segmenting without researching. Customer market segmentation should be based on research and understanding. If it isn’t you could end up marketing to stereotypes, not real people.

Final thoughts on how to segment your customers

Customers respond best when they feel as if you are speaking to them directly. By segmenting your target market, you can better provide the kind of personalized content that they want. This will lead to increased loyalty, engagement, and conversions. In fact, brands that personalize the user experience see an average increase of 20% in sales. That alone should make this approach worth considering.

Editor’s Note: This article reflects the opinion of our guest author.

About the guest author

Kristin Savage is interested in writing and planning to publish her own book in the nearest future. Also, she has been a reviewer at Pick Writers for a few years and is known for her thorough approach to accurately assess newcomer translation services. You can find her on Facebook and Twitter.

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