All customers are the same. Such a generalist approach has tanked many businesses in the past. Do you know what your customers prefer, their buying habits, transaction history, purchasing behaviors, and channel preferences?
We know that customer segmentation involves dividing customers based on their shared characteristics such as age, gender, etc., but there are many more audience segmentation metrics, which will make a business stay ahead of the competition.
The way to find the customer segmentation metrics are many, starting from search engines, social media, and shopping websites to ‘old-school’ advertising and direct customer surveys. Many businesses take the services of research firms to go deep on the path of finding about their real customers. With more focus on digital experiences, it is far easier to get customer segmentation metrics, as customers leave many digital footprints and hints.
How customer segmentation metrics impact?
A direct bearing of understanding such metrics is customer retention and growth, which is the lifeline of any business.
Your strategy on marketing, decision to upsell or cross-sell, and ability to assess and mitigate customer risk, gets impacted by knowing all customer segments. The customer segmentation metrics also allows decisions on more areas like email marketing, automated email campaigns, and SMS marketing based on insights.
Improving customer experience through traditional means is passé. The differentiated customer experience is only possible when you know who your customers are. Such knowledge even helps the development unit create or modify the product or service.
Now that we are aware of how customer segmentation impacts business and revenue. Let’s look at some of the top customer segmentation metrics.
One of the most common and popular segmentation metrics is based on age, gender, ethnicity, education, occupation, income, and marital status.
Males prefer comfort over luxury when it comes to some consumer brands, can be arrived at looking closely at this type of segmentation.
If you look at age, starting from Baby Boomers and Generation X to Millennials to Gen Z, there are clear preference differentiation amongst these demographic groups. Millennials being the most targeted and largest population segment, while Baby Boomers preferring physical store purchases than online.
Income is sometimes a difficult metric to find, but once you are able to assess what your customer’s income level is, you know which approach to take to acquire or retain the customers in those groups.
Customer segments based on country, region, city, or climate is an interesting aspect since it requires more planning to target and get the product or service to the customers in different geographies.
Understanding this kind of segmentation helps in knowing what the customer values and what suits them as per the weather and local culture.
3. Profit level
Segmenting customers by the type of service based on incremental costs, such as your premium or preferred customers, is another method at a later stage that helps businesses.
Customer care and service improve with each level, and niche offers are reserved for such customer segments. They will respond better to certain targeted campaigns and offers than other segments.
Past purchases or transaction history and even browsing history and abandoned carts say a lot about the customer. Amazon and many shopping sites know precisely what the customer will choose in the future based on their past purchases, so this type of metric is easy to find and capitalize on.
Purchases nearing occasions such as Christmas, Halloween, or Valentine’s Day is an important variable to look at as well.
5. Interest or Lifestyle Segmentation
A poll on social media sites will provide better metrics when it comes to this customer segmentation.
The audience could be travel-junkies, vegans, or even minimalists. Their unique traits and lifestyles define their choices. Fashion, food, environment, and community are certain interests that drive purchasing decisions of certain audience segments.
6. Lifecycle or Customer Journey-Based Segmentation
The stage, at which the customer is in the buying process, is an essential metric for marketers to understand and find out about.
There are many ways to entice a customer who may have visited the website but did not make any purchase or has not made a purchase in a year or more.
Knowing the various customer segments is like possessing the Holy Grail in the business world because more revenue arriving out of more sales is the lifeline of any business.
NeuroTags connected digital packaging with integrated loyalty program software helps brands in engaging and onboarding consumers, and helps in collecting essential data points in the entire product lifecycle. The collected consumer data helps in customer segmentation as per the metrics.
Please contact us to know more about NeuroTags offerings.