Customer segmentation: Personalize customer experiences at scale

Customer segmentation is one of the factors businesses need to pay attention to to optimize business efficiency. By identifying accurate customer segments, businesses can convey the most accurate messages to customers. In the following article, Viindoo will share information related to customer segments. Please follow and apply to increase business efficiency!

What is customer segmentation?

Customer segmentation is the process of dividing customer groups into specific objects based on common characteristics. Each segment will have its own characteristics and shopping behaviors. From there, it affects the business strategy of the enterprise.

Businesses need to adjust content and messages to suit each customer segment. A marketing and sales strategy suitable for target customers will bring higher business efficiency.

Customer segmentation can be based on demographic characteristics such as geographic location, age, gender, income, etc. In addition, there are many other ways to segment customers, helping businesses better understand their target audience and optimize their outreach strategy.

Why is it necessary to identify customer segments?

Personalize customer experience at scale

Global consumer trends in 2022 show that customers increasingly desire personalized experiences. More than two-thirds of customers want to feel cared for and are willing to spend more when they feel that way. With 9.5% of business revenue at risk, understanding each customer's specific needs is critical.

Whether at the brand level or in a smaller marketing strategy, businesses need to understand the needs and desires of each customer group to reach them most effectively. What do business customers care about? What are the commonalities between the target groups? And how can businesses group similar customers to better personalize their experience?  

Analyzing customer segments will help businesses better understand current customers, making strategy development easier for the marketing team.

Businesses can also look for segments to focus on, and understand how and when customers move between segments. Customers are not fixed in one segment but often move. For example, a person might move between segments when they graduate college and get their first job, then get promoted (and move into a higher income group), then go from renting an apartment to owning one home, and from being single to getting married and becoming parents.

Enhance customer loyalty and lifetime value

Customer segmentation brings great benefits to businesses, especially increasing customer lifetime value. When businesses understand their customers better and can reach them effectively, this drives brand loyalty.

Instead of customers only visiting cosmetics stores twice a year to buy large shopping carts of skin care products, customer segmentation can help businesses better understand their needs. This can lead to customers returning five times per year with smaller shopping carts. Even though each purchase is less, customer loyalty increases because they regularly interact with the business.

These small, frequent purchases are not only more efficient, but they also help predict customer behavior better. From there, it supports future business decisions for businesses. This not only enhances loyalty but also increases customer lifetime value.

Grasp changes in customer needs

Customer behavior and needs are not immutable. At the same time, customer experience needs to adapt over time to keep up with this. For example, the big changes of the past few years have created new needs as human experiences change. From working in the office to working remotely, from eating at restaurants to eating at home,... All of this requires businesses to update market knowledge to develop and adapt in time. with each customer segment. 

To do this, businesses need to develop customer segmentation models. Administrators can incorporate new information and segmentation data, then adjust accordingly. 

Successful segments in one season can be completely different the next. Current customer needs also change with the development of society and technology. Understanding the reasons behind customer choices will help businesses overcome fluctuations and reach new segments more effectively. 

Popular customer segments today

Customer segmentation by geography

Geographic customer segmentation is dividing customers based on geographic location and common language. 

• Preferred language: Knowing languages ​​helps businesses convey messages better. For example, in the US it is possible to use both English and Spanish.
• Location: Understand where and how to reach customers. Marketing strategies for New York residents will be different from customers in Alabama.
• Transportation: Knowing how your customers travel helps optimize outdoor advertising, like on trains, billboards or subway stations.

Psychographic segmentation

This segmentation is based on customer preferences, values, and personality traits. 

• Hobbies: Activities, sports, pets that customers like. It is possible to direct advertising to these areas or cooperate with relevant organizations. 
• Value: Determine value through surveys or interviews, then refine the product or service to meet their specific needs. 
• Personality traits: Helps market in a way that is easy for customers to relate to and respond to. 

Segment customers based on behavior

This segment looks at purchase history, response to marketing campaigns, and product usage. 

• Website activity: Track the pages and elements customers interact with the most. 
• Ecommerce activity: Monitor actions when customers visit your online store, such as purchased products or abandoned carts. 
• Purchase frequency: Customers who buy multiple times have higher value, consider rewarding regular customers with exclusive offers.
• Recent interactions: Understand recent interactions to take further action, like rewarding positive feedback or strengthening relationships with customers who have had negative experiences.

Segmentation based on needs

This segmentation is based on specific customer requirements for a product or service. 

• Product features: Find out what features customers need to keep the product relevant. 
• Service needs: Include an onboarding process, efficient customer service, or quick delivery. 
• Delivery method: Classify customers according to specific delivery needs. 

Customer segmentation by technology

This segmentation is based on customers' usage of devices, applications, and software. 

• Device type: Classify according to the type of device customers use to interact with the website, such as phone, tablet or computer.
• Browser type: Customers use different browser types such as Chrome, Firefox, Safari. It is necessary to ensure that the content displays well on these browsers. 
• Origin: Customers can find you through social networks, search engines or referrals. Knowing how they found your business helps optimize your conversion path. 

How can businesses accurately identify customer segments?

• Step 1: Determine customer segmentation goals and criteria: Set segmentation goals and determine customer division criteria, such as age, income, location, purchasing behavior,... 
• Step 2: Market research: Collect and analyze data about the market, customers, competitors, and consumer trends.
• Step 3: Analyze customer data: Use statistical methods and data analysis to detect customer patterns and groups. 
• Step 4: Identify customer segments: Identify customer groups with similar characteristics and quantify each group.
• Step 5: Build target segments: Select target segments and determine the position and value of the business for each segment.
• Step 6: Build strategy: Plan and implement a marketing strategy suitable for each target segment.
• Step 7: Check and evaluate performance: Monitor and measure the effectiveness of strategies and adjust monitoring plans promptly. 

Optimize the power of customer segmentation with Viindoo CRM

Viindoo CRM is a reliable solution that helps businesses have a comprehensive view of their customers. Along with that, this solution also supports administrators in managing customer journeys and sales teams, thereby increasing sustainable revenue growth. Viindoo's CRM software will provide businesses with a comprehensive picture of sales, marketing and customers.

Not only that, Viindoo CRM also supports strong customer data analysis, helping to shape and better understand consumer behavior and needs. Based on this information, identifying and classifying customer segments becomes simpler. Thanks to that, businesses better understand their target audience and create effective marketing and sales strategies.

Viindoo CRM's ability to optimize customer loyalty programs according to customer segments helps brands increase interaction and personalization with each specific customer group. By customizing programs to each segment's needs and interests, businesses can provide the best customer experience. This will help businesses increase their chances of retaining customers and creating long-term relationships.

Viindoo's above article has compiled information related to customer segments for customers. Customer segmentation is something that any business needs to pay attention to in order to improve relationships with customers, increase the effectiveness of marketing strategies, and increase sales. Please contact Viindoo immediately via hotline +84 225 730 9838 for more specific advice!