Customer segmentation is the journey of organizing your customers into segments depending on customer behavior and factors like demographics, industry, and income. These simplified customers help utilize them upfront in marketing campaigns and analyze performances based on the same.
Customer segmentation is like grouping similar people sharing the same characteristics. For instance, a family of four could be described as having about 12 children – and that number is determined by genetic makeup alone. There are several possibilities with the idea: There could not exist any “big brother” who was born into all three groups but had fewer kids than one group would otherwise bring together. Or there’s no way to know whether different types will still come through from various background mutations in just this short time after each generation unless their parents have inherited them.
Significance of customer segmentation (What?, Who? & How?)
“What” are the demographics of your customers?
Understanding user demographics includes age, gender, location, device that helps us with user specification.
“Who” are your customers with varying types of interests they share?
Analyzing your customers’ interests, you get one step closer you the likes and dislikes that lead to the right decision making.
“How” do your customers behave, along with their requirements
Last is to get familiar with your customer actions on the website or in the business to determine similar segments from them all.
These are the (3) three questions you should ask yourself before you start segmenting them. According to the research, most customer segmentation practices don’t work as we lack understanding before segmenting.
Different types of customer segmentation
Customer segmentation is categorized in various types based on the industry or business use case or sometimes also based product. Here we are listing universally used types of customer segmentation:
- Demographic segmentation – age, gender, earnings
- Geographic segmentation – country, state, city
- Psychographic segmentation – personality, interests, values
- Behavior segmentation – user actions, interactions
How to implement customer segmentation?
“Answer – Using Propellor Tool,” propellor is a data analytics tool backed up with artificial intelligence that has user segmentation and a unique feature named “Box – Cohorts.” This tool can design and develop custom business use cases and allow users to get customer segmentation analysis with just a few clicks; that’s it. Further are the steps to implement customer segmentation with the propellor tool.
Step 1: Understand your Userbase
As discussed above, the tool helps us understand our customers better by knowing their stage of the life cycle at our fingertips with an easy-to-understand and flexible to edit tool user experience provided.
Step 2: Create micro-segments for effective management
Once the user base is cracked, we can track your user’s actions based on available geographical visualization options. We can create a micro-segment of similar users and then push them to cohorts.
Step 3: Generate different types of customer cohorts
In this stage, we can precisely use slice and dice with natural language like “cohort creator,” a specially designed propeller tool for business owners to easily define customer cohorts and try out different combinations as per the use case with a few clicks.
Step 4: Automated segments based on proven models
So now, as it feels easy to read, we have made this powerful feature simple to use it. Now that all bases are ready, with cohorts and customer segments, we can push automated features based on proven models and monitor the life stages of your customers based on the performance. Next, try it yourself.
This article has tried to incorporate all the points that one should acknowledge for implementing a successful customer segmentation. We hope you like this effort of generating content. Feel free to share this piece of information with your exciting readers. See you around, thanks for reading.
Try out Customer Segmentation today! Request Demo at Propellor