Segmentation Will Help You Know Your Customers Better

Segments

Too often small and big companies take decisions about marketing strategies just assuming to know their customers’ habits and behaviours. But if what guessed is wrong, they could end up loosing customers or marketing opportunities.

Building a strategy to reach audience and make customers loyal is not just matter of assumptions. What businesses really need is knowing their customers deeply. Only understanding the client’s point of view is possible to set business goals effectively, design tailored strategies and evaluate results.

There are many points of view from which looking at customers. To start, the most effective and efficient way is to create different general categories to group clients. Then, investigating about each of them is going to be easier. This process is calledsegmentation. It allows creating different categories of consumers to which address different and more tailored strategies.

Is possible looking at client by different prospective. The most common characteristics used to group people are geographic, demographic, psychographic andbehavioural.

To make this process easier, you can start asking yourself some questions about customers. This is the first step to understand how much you know them. The more detailed your answers are, the highest the chances to reach them.

Let’s outline the different typologies of segmentation in further details.

Geographic Segmentation

The first information to know about your customer, which is also the easier to obtain, is identifying where they are located. Consumers in different areas have different needs, wants, and cultural characteristics to target.
Ask questions such as:

  • Where do your consumers live?
  • Where do they work?
  • Do they live in the centre or in suburban areas?
  • In which neighbourhood?

Demographic Segmentation

This type of division allows separating your market by age, gender, education and income. This information may be slightly more complicated to get. You can ask your customer questions such as:

  • How old are they?
  • Are they male or female?
  • How much do they earn?
  • What is their profession?
  • Do they own a house?
  • What is their education degree?
  • What is their marital status?
  • In which life cycle stage are they?
  • In which family life cycle stage are they?
  • What language do they speak?

Psychographic Segmentation

Divide your consumers by psychographic criteria means grouping them according to their lifestyle, personal value, interests, and beliefs.

  • What are our customer’s interest and habits?
  • What are the personal values of our customers and how these influence their purchasing decisions?
  • What do they believe in?
  • What is their lifestyle?
  • Which life goals (values) are most important to them?
  • Are there any outstanding features in their personality?

Behavioural Segmentation

The behavioural segmentation is maybe the most important one. It helps identifying specific behavioural patterns of consumer group such as occasion to buy, product usage rate, marketing benefits obtained in consuming the product, loyalty. This kind of segmentation can be quite tricky. Answering questions like the following ones may help your business.

  • Who are the most loyal customers?
  • What do they like and dislike about us?
  • What is the best channel to contact them and how often?
  • Which are the types of contents they respond best?
  • Why do they prefer to buy from the competition?
  • How price-conscious are they?
  • Who are the most valuable customers? Do you treat them differently?
  • How long is the time lag between the first interaction and sale?
  • How much afford is spent in acquiring a new customer?
  • Why the customers are sometimes disappointed?
  • What are the customer retention rate and the revenue losing by not retaining customers?
  • What is the lifetime value of customers?
  • What is the cost of client acquisition?
  • Have any customers recommended your business online or offline?
  • What is the customer satisfaction rate?

If you are not able to answer most of these questions, you may be in troubles. It means, indeed, that you are missing some marketing opportunities since your knowledge about your customers is broad and not specific. Once you conducted this analysis you can tailor more precise marketing mix on the different segments individuated.

This is extremely important. Indeed, if a retailer is able to meet the customers’ expectations, there are high chances that clients will be satisfied and loyal to the firm. If at the contrary buyers are disappointed, they may be likely to go with rivals. And this is not certainly difficult nowadays with the high level of competition present in almost every industry. But in order for this process to be effective, you should be sure that the information about your clients are precise. Therefore involving your own customers in the strategic plan is essential.

How can you do this?

You could involve them in a survey or focus group to better understand their needs and to get advice to improve your product or service. Asking is definitely more effective than guessing.

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