Segmenting your customers for your brand is crucial but understanding its advantages is much more vital.
You must have heard a proverb- ‘Every shoe fits none’.
Well, here it fits the same. Customer Segmentation is a better choice to know your customer better. And in the criteria which best suit them. It is not that bifurcating your customers into good and bad but in the different criteria. So that you can pitch your message to your customers in a better way.
And in the wholesome goodness of this segmentation, you tend to know the benefits of customer segmentation also.
According to a recent survey, 70% account for segmentation. This is foreseen while making plans for a business strategy.
Beginning with your holiday market segmentation. This helps by focusing on a specific group of customers which will surely help you to make your marketing strategy relevant. At least this will be to your customer’s taste & preferences. You can get the idea of niche products that will be likely desired by your customer segmentation strategy.
According to potential customers and thereby customer retention. You can very well build your marketing strategy that includes niche e-commerce markets.
What is Customer Segmentation?
Every customer journey is different…
And so are the marketing strategies to convince them to buy.
The customer segmentation process refers to audience segmentation and targeting. The whole concept deals with skillfully categorizing the ideal audience and loyal customers into various segments and targeting them accordingly.
“Segmentation” is in itself a whole concept that brings a division of areas, functions & ideas. This gets segregated in the context to –
- Demographic (age, gender, religion, sect, family size, family size, and more)
- Geographic (location and where they work)
- Psychographic (social class, lifestyle) and
- Behavior (spending, consumption, habits, and more).
How Customer Segmentation can Benefit my Business?
As already discussed above, customer segmentation techniques help you to categorize your customers into various segments. And these segments are based on different criteria. It eventually helps you to connect your customers better by targeting them with their individual demands and requirements.
This blog further guides you through the 7 most crucial benefits of customer segmentation of all time. Read on…
1. More Customer Retention
A personalized connection with your customers will help you to win satisfied customers.
About 75% of satisfied customers are more likely to remain with that organization who regularly meet up their needs.
Not Sure How To Retain Your Customers?
These Top 10 Customer Retention Strategies Are Surely Worth Giving A Shot!
2. Enhances Competitiveness
The more customer retention, the more will be revenue generation.
And all of this will enhance your competitiveness in the market. If you segment up your market, you are well known to your customers & accordingly. You will work to give them the expected result.
3. Establishes Brand Identity
By segmenting your customers, you can make them well aware of your brand. Identifying your brand will help your customers to directly engage with your products. This will increase your goodwill in the market & a brand value will be established among your other competitors.
4. Better Customer Relationship
Better Customer segmentation will lead to developing a better relationship with your prospective customers. This will leave for developing a better relationship for your client base.
Communicate with your customers on their queries & requests. Regular communication will make you update about the new upcoming changes & opportunities to be availed of.
5. Leads to Price Optimization
Try to understand the social and financial status of your customers. This data will assist you to pace up with the price optimization accordingly. Learning “How to price a product?” is equivalent support to boost business when segmenting customers on the basis of their spending psychology.
6. Best Economies of Scale
Customer segmentation helps in better allocation of resources which in return helps you to gain economies of scale.
Economies of scale mean when you are able to achieve your desired goal and that too at the most efficient cost. This can be done through customer segmentation. Therefore, try to focus on a limited number of resources which will help to serve with resources.
7. Improves Channel of Distribution
Customer segmentation will improve your channel of distribution. By knowing the right number of customers you can direct the right channel of distribution. This will remove confusion among your team members about whom they have to deliver the product & at what time.
You will be able to choose a precise channel of distribution & that too at minimal cost which eventually serves the best needs of your customers.
In a Nutshell
Customer segmentation should be done very carefully. Because your whole business plan depends upon your target audience only.
In this blog, we have discussed everything concerning the benefits of customer segmentation. Hence, choose your customers wisely & make a marketing plan to accomplish their needs & desires.
How profitable your customer segmentation is? Please share your thoughts with us in the comment box.