Customer Segmentation
  By Debbie Cline

I have lots of groups of people in my life that I connect with often. Local friends, school friends across the country, family, colleagues, customers and others. Although I tend to wear my heart on my sleeve and am the same core person across each group, I connect with and speak to them differently. Some communications are email only, some are daily phone calls, and I have a different message and tone when speaking with a customer board member than with my Mom. 

The same goes for your prospects and customers. Within your customer base and target audience there are different groups of people. The people who make up these groups are from a variety of places and have unique interests and needs, as well as expectations as to how you will communicate with them and more. How do you make it work for everyone? With customer segmentation. 

Every business, big or small, needs a customer segmentation strategy to better target their customers and increase revenues. Customer segmentation is grouping your target audience by certain traits or behaviors, such as demographics or geography.  

Customer segmentation allows you to target the right customer with the right offer at the right time. It lets you focus on the interests of distinct groupings, rather than having to address the entire audience as a whole. Segmentation increases focus which increases efficiency and effectiveness and also creates the level of personalization that customers expect today.

The core types of customer segmentation are:

  • Demographic – based on gender, age, occupation, marital status and income
  • Geographic – based on country, state, city 
  • Psychographic – based on personal attributes, values, interests or personality traits
  • Behavioral – based on interactions, spending and consumption habits, browsing history

Segmentation can be simple, very complex or anywhere in between. You can apply layers of segmentation and include as many as you wish on top of the core types. A few other common ones include preferred technologies, the marketing channel that drove the engagement, position in the sales funnel and mobile device type. As an example, combining demographic, technographic and geography to target men in their 40s that use android devices and live on the west coast.

Customer segmentation is critical in marketing. Instead of a small number of large marketing campaigns targeting everyone, it’s better to have a larger number of smaller marketing campaigns that are aligned to the needs and interests of targeted specific audiences.

This strategy allows for deeper personalization and customer engagement, as they receive content hand-picked for them. In addition to using this for email marketing, you can apply customer segmentation to specialized ads on different sites, categories of blog content and social media content.

The top 10 benefits of segmentation are:

  1. Engaged audience
  2. Increased brand loyalty
  3. More effective marketing
  4. Better quality leads
  5. Higher sales
  6. Targeted digital advertising
  7. Lower customer acquisition costs
  8. Brand differentiation 
  9. Enhanced growth
  10. Improved customer retention

In a competitive, data-driven, and thriving business world, customer segmentation is critical for success. It also benefits your customers, allowing them to feel more connected to your brand.

At Buzzy Rocket we're passionate about supporting startups. Whether you are a client or not, we want to support your vision and your growth. We know first hand how exciting, difficult, fun, and lonely it can be to bring your vision to life. Contact us for more information about how we can support your startup and/or if you want to be considered for the Founder Spotlight Series.

Debbie is co-founder, chief of customer success at Buzzy Rocket and yellow lab lover. From LA to London, she is well known as an expert in creating that certain elusive magic that drives explosive growth at the intersection of companies, customers and mobile. She has proven strategic vision, and isn’t afraid to get in the trenches. In fact, she’s been doing this at companies big and small for 25+ years. Her background includes executive level positions at both public companies and startups where she has proven over and over again that her passion, drive and results oriented perspective get it done. She is tenacious, loves the game changer and loves to win.

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