Built to Suit the Retail Real Estate Industry PlainVanillaShell US Edition You are signed in as  
guest  

Sign in now  

Logout  
topnav
Home News Archive Featured Stories Retail Real Estate Marketplace Contact Us Subscription Info
op ed  

op ed

Print Page What is Customer Segmentation and How is it Used?
From The Buxton Co

Segmentation is one of the most powerful customer analytics tools in marketing, however, it is also the most misunderstood.

What is segmentation?

Segmentation is the process of dividing customers and prospects into different groups, each of which share characteristics and behave similarly within a segment, but look and behave differently across multiple segments.

How will segmentation improve my business?

Not all customers are the same. Segmenting allows you to more precisely reach a customer or prospect based on their specific needs and wants. Segmentation will allow you to:

  •   Better identify your most valuable customers
  •   Improve your return on marketing investment by only targeting those likely to be your best customers
  •   Increase customer loyalty by tailoring your services to your best customers
  •   Improve customer service
  •   Positively impact revenue and reduce waste across your organization

What are the different types of segmentation?


psycographic segementation example


Here is an overview of the most common types of segmentation:

  1. Demographic: The simplest segmentation option, and the most common. Demographic segmentation groups consumers by information you might see in a Census, such as: Age, gender, income, education, nationality, family size, etc.
  2. Behavioral/Psychographic: These types of segmentation commonly look at lifestyle and personality characteristics that influence purchasing and consumption decisions.
  3. Geographic: Geographic segmentation groups consumers based on location. This might include examining consumers by country, region or city, or taking a deeper dive to determine if they are in an urban, rural, or suburban area.
  4. Combination: Often times, it makes sense to use multiple types of segmentation to capture the best picture of your customer. When there is an absence of customer data, businesses may turn to reviewing demographic and geographic information to get a basic understanding of their best customers, or work with an analytics partner to leverage enhanced customer segementation insights.
What type of segmentation should I use?

Selecting the approach that’s right for your business depends on your business objectives and the data at hand. No matter which option you choose, segmentation will better allow you to target your ideal customers and reduce the costs spent targeting those outside of your ideal customer segments.




Buxton is the leading customer analytics firm that helps organizations identify who their customers are, where those customers are located, and the value those customers have to the organization.

2651 South Polaris Drive
Fort Worth, TX 76137
1-888-2BUXTON

buxtonco.com


Feature Articles

If you have an opinion on the retailing or retail real estate industries, take this opportunity to share your thoughts. Articles should run between 400 and 800 words. Topics can, be general in nature, consumer observation or specific to retail concepts or practices.

Articles will be posted for at least one week and will then be placed in the Editorial Archives. All articles submitted will be read and considered but we cannot guarantee publication. Each published article will carry the submitters byline (if desired) and is a free service to our community.

Article ideas and suggestions are also always welcomed. Contact PVS@PlainVanillaShell.com

 
Privacy Policy | Terms & Conditions | Contact | About Us