Blog 78: What are the types of customer segmentation?
- Idea2Product2Business Team
- Jul 26, 2024
- 2 min read
Updated: May 7
Every customer is unique. Customer segmentation groups existing and potential customers by shared characteristics. This allows us to reach various customer segments with timely and accurate information. (blog 14: User personas to understand our target users).
Note, prior to segmenting our customers, we need to find our target audience (refer to blog 77: How to find our target market?).
Popular types of customer segmentation
1. Demographic segmentation categorises customers by shared characteristics, such as gender, age, marital status, educational level, occupation, household income and location.
For example,
Age: Help us understand their preferences, preferred channels or touch points, and etc.
Occupation: Provide insight into our customers' income and their budgets.
2. Geographic Segmentation categorises customers by geography which includes preferred languages, location and etc.
For example,
Preferred language: Help us communicate better.
Location: Help us adopt the appropriate marketing approach.
Transportation: Understanding customers' commuting habits helps us choose the best transport mode for displaying our ads.
3. Psychographic Segmentation categorises customers by interests, values, and personality traits.
For example,
Interests: These are things, such as sports, games, pets, and activities, that customers enjoy. We can direct our ads towards their areas of interest or collaborate with relevant institutions.
Personality traits: Segment customers based on their personality traits. This will improve our marketing to be more relatable and effective.
4. Behavioural Segmentation categorises customers by purchase history, response to marketing campaigns, product usage patterns etc.
For example,
Website activity: Track customer activities (pages they visit most often, etc.)
E-commerce activity: Identify products they’ve purchased or the ones they’ve seen but are yet to purchase - abandoned carts etc.
Frequency of purchases: Identify customers with frequent purchases and high lifetime value to reward them with exclusive offers.
Recent customer engagement: Knowing customer's recent interactions will help you decide next steps.
Refer blog 92 for crafting a personalised experiences using behavioural segmentation.
5. Needs-based Segmentation categorises customers by their must-have requirements in a product.
For example,
Product features: Customers have specific requirements and choose products accordingly.
Service needs: For some customers, it could be the efficient onboarding process, customer service, or quick deliveries.
Delivery method: Customers have specific needs, such as how and when we deliver our products. Hence, we categorize individuals according to their specific shipping needs.
6. Technographic Segmentation categorises customers by their use of devices, applications, and software.
For example,
Device type: If most customers visit our website from their phones, we need to consider introducing a mobile app and ensure our site is mobile-responsive.
Browser type: Customers use various browser types, including Google Chrome, Mozilla Firefox, and Safari. Test content to ensure they display properly on these browsers.
Original source: Customers can find us via social media, search engines or even referrals. Know how they discover our product so as to optimise the conversion path.
Jump to blog 100 to refer to the overall product management mind map.
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All the best! 😊
