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Why Your Business Needs Customer Segmentation

Posted by IndustrySelect on Monday, August 19, 2019

100036_target_business_growth4 MIN. READ

It's no secret that the business world can be cut-throat, seemingly more now than ever before. As the digital age revolutionized investing and startups, every industry became crowded by competitors, any one of whom would be more than happy to take the spot your business occupies on the totem pole.

Here's how breaking down your list of potential customers into certain categories can help your business stay ahead of the competition and accelerate profits, customer experience and efficiency for your organization. It's called segmentation.

What is Customer Segmentation?

Customer segmentation simply involves separating your clientele into "alike" demographics. Take a high school, for example. You could easily say "this is a collection of young adults ages 13 to 18." But, that doesn't tell you anything unique about them, so you separate them by class, freshman through senior, giving you a bit more information.

That probably wouldn't be specific enough either, so what about their preferences, abilities, activities, and more. With that kind of information, a marketer could target those who are active in sports, those taking AP history and so on.

You can break down your customer base in the same way, getting as detailed as you wish. For example, separate your customers by age and then by which products they purchase and with what frequency.

Perhaps there's a younger demographic that buys one product your older customers are not interested in. That information can be incredibly valuable, because you can market your products to the demographics you know will be interested, as opposed to just taking an educated guess or spreading your efforts too widely.

Segmentation Helps with Lead Prospecting and Marketing

Lead prospecting is perhaps the first area in which customer segmentation shows off its usefulness. Let's say you identify one product in your catalog as being exceptionally popular with individuals ages 17 through 23, while another is more popular with people ages 44 to 49. You can then develop separate contact emails or marketing campaigns aimed at each of those demographics, personalizing them by demographics for receiving those advertising materials.achievement-3612401__340

Personalization is important. HubSpot performed a data analysis that showed that personalized calls to action (CTA) performed on average 202% better than generic or generalized CTAs. That's more than four times better.

Consumers are impressed when a company targets them with marketing that appeals specifically to their demographic, and 80% of them report that they value customer experience as much as a brand's services or products.

That suggests that most consumers feel that being valued by a brand makes up for any deficiencies in its products or services. Combine killer products and services with personalization, and you've got a winning combination on your hands.

Using customer segmentation to create personalized marketing campaigns will also help your bottom line. Marketing automation provider Braze recently examined 30,000 marketing campaigns it ran over a two-year period and found that personalized campaigns aimed at specific demographics generated four times more conversions than generic marketing campaigns.

Customer Segmentation and the Evolution of Your Business

Perhaps the most underrated benefit of customer segmentation can be seen when a business rolls out a new product or service. For any business, launching a new product or service carries a significant amount of risk. With customer segmentation, however, you can understand exactly who's buying your products and, more importantly, glean an idea of why that demographic is buying them.

You can then use that information to develop new products and services that will appeal to that customer base, and more, expanding and evolving your business while avoiding many of the risks typically associated with product or service launches.

Customer segmentation is simply an incredibly reliable method of accelerating the growth of your business, increasing profits and making your customers feel valued. For more information, check out IndustrySelect's service.

Subscribers can gather up to 30 data points to help them identify and pre-qualify the best leads. Profiles also include the names, titles and email addresses of hard-to-reach executive decision-makers. All IndustrySelect data is hand-verified by its 80-person data-research staff, and the IndustrySelect data sales team can provide your business with thoughtful strategies for working with the information.

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To learn more about how you can use IndustrySelect to work out your own customer segmentation and revolutionize your business, visit our website today and start your free demo.

 

 

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