A B2B Guide to Customer Segmentation: How To Create Actionable Groups To Grow Better
April 19, 2021
The key to digital marketing is personalisation. Read on to learn more about customer segmentation and customer personas to develop the best strategy for your brand.
Personas and segments play a key role in creating personalisation strategy for your business. They are also often used interchangeably to group and define the characteristics and profiles of customers, but they are two distinct concepts that rationalise your marketing efforts. Segments help to forecast market interest for what products or services you're offering.
Whereas, personas help you to understand the emotional and behavioural triggers behind individual customers within that market. The two concepts go hand in hand and should be used as a complimentary set to gain a more detailed and accurate overview on your customer profiles.
Closer look into Customer Segmentation:
Customer Segmentation is the practice of grouping your customers based on distinct needs and/or characteristics.
Segmentation allows you to:
manage company's relationships
easily tailor and personalise your marketing, service and sales effort ]
boot customer retention and conversions
Why should you segment customers?
Learning about your customers on a deeper level lets you tailor your content to their unique needs and challenges. Segmentation also allows you to create targeted campaigns to resonate with your customers, thus enabling conversions.
Segmentation provides you with useful information that can help you to improve your customer service. Further, with tailored content and interactions you can also boost customer loyalty and understand who your most valuable customers are and why.
Lastly, segmentation also provides you with data on which channels your customers are spending the most time and what are they looking for. Overall, segmentation lets you identify new opportunities and for products, support, and service efficiently.
Types of Segmentation
There are typically seven types of customer segments, each with its own sub categories. The key to an effective segmentation strategy would be to choose only those models that are most relevant to your service offerings.
The most commonly used ones are demographic, psychographic and geographic. However to gain a more detailed insight into who your customers are you'd have to segment them on the basis of behavioural tendencies, values and needs. If you're planning to offer a technological value-added offering, you would need to also consider a model that segments your customers based on the technology they often use as this will help you build a solution that can be offered on a platform or device native to them.
How do you build a customer segmentation strategy?
Lay out your customer segmentation goals:
Customer Segmentation goals are always unique to your business. It's also a 'not a one size fits all' process. Your goals will differ based on your business' size, type and industry and who your customers are.
They must also be relevant across your marketing and sales team, so it's important to keep your own company's business needs as a launching pad and to cross validate them between your teams.
Segment your customers into groups:
There isn't a set way of grouping your customers but they need to align with the goals you've set. For example, if you want to share targeted ads with your audience members and customers in Northern Europe in hopes of boosting conversions in that region, you can geographically segment your customers accordingly.
Target and reach your customer segments.
Now that you've set goals and segmented customers, think along the lines of how your marketing and sales department can effectively target your customers. Marketing can tailor and customise content to attract, teach, and meet the needs of your Northern European audience members to boost leads and brand awareness.
Sales can identify common traits shared by your most-qualified Northern European customers — as well as best ways to reach out to and communicate with them — to increase conversions.
Service can use your customer segments to prepare materials and resources for them based on challenges Northern European customers are most likely to experience
Analyse your segments and make adjustments on a quarterly basis.
Analysis helps you refine your segmentation efforts. It's important to check in with your marketing, sales and service teams to get their feedback on necessary adjustments. You can also gather feedback from your customers to more effectively segment them into appropriate groups.
For example, you could conduct surveys to improve your psychographic segmentation by asking customers about their feature use and product-use habits/ tendencies. You could also gain feedback on what they like about your competitor's service, which can improve your service/product offerings.
Lastly, review the way your customers are segmented whenever you update your product or service, re-brand, or revise your buyer personas.
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