It takes time to discover the right marketing strategy for your brand and often involves both hits and misses along the way.

One mistake, in particular, that many brands make today is focusing only on what they offer in terms of products or services. This leads to static content that has the potential to reach only a tiny fraction of intended audiences.

So, what is the solution? Think about your target audience.

So much depends on the characteristics, actions, behaviors, demographics, pain points, and expectations of those potential customers, so getting to know them better is a good place to start.

To help with this, consider the benefits of customer segmentation and the creation of distinct buyer personas for each segment.

Customer segmentation provides your business with a refined way to target your customers and create a better overall experience. In turn, it can strategically guide your marketing strategy to greater success.

Ready to learn more? Keep reading our post!

7 Customer Segmentation Models

Customer segmentation can be approached by way of several different models, including the following most common ones used by marketers today.

1. Demographic Segmentation

Customer demographics include such factors as age, gender, marital status, education, occupation, and income.

2. Geographic Segmentation

Geographic segmentation includes customer locations, including town, city, state, and country. This segmentation model is particularly useful to local businesses or those targeting a specific area.

3. Behavioral Segmentation

Behavioral segmentation model centers on customers’ behaviors, tendencies, habits, purchase history, browsing history, and such things as average order value.

4. Psychographic Segmentation

The focus of psychographic segmentation centers around the consumer’s personality traits, interests, opinions, and attitudes.

5. Technographic Segmentation

Technographic segmentation is based on such factors as preferred technologies, software, and device usage, such as mobile or desktop.

6. Needs-based segmentation

Needs-based segmentation focuses on the needs of specific groups and preferred products or services to fulfill those needs. 

7. Values-based segmentation

Values-based segmentation looks more at the economic value of a customer group.

How to Do Customer Segmentation

Here are the steps to take to efficiently go about doing customer segmentation for your organization and marketing efforts.

1. Determine goals and preferred outcomes

As with any strategy, you first need to determine the goals you wish to accomplish with customer segmentation and what the preferred outcomes are for each.

Armed with this big picture information, you can better devise your marketing strategy for meeting these specific goals and outcomes and incorporate ways to measure success rates.

2. Select your segmentation model or models

With your goals in mind, select which segmentation models will be most beneficial. 

You may choose to rely on just one, such as demographics, or require two or more, like geographic and behavioral models.

Switching up your segmentation approach as your business grows isn’t just smart—it’s usually necessary. Let’s say you started out using only demographic segmentation. Once your product lines expand, you might find that customers’ behaviors or values start to matter more in terms of how they interact with your brand. Sometimes, companies resist making these changes out of habit, but hanging onto outdated models can leave you a step behind the competition (and let’s face it, that’s not a great place to be).

One of those funny things about segmentation: you can get lost in the weeds if you aren’t careful. I’ve seen teams gather mountains of data but then struggle to turn any of that info into actual strategy. Pick your models with intent; don’t just collect data because it’s there. If you’re honest about your constraints—time, people, money—you’ll make smarter choices about which segments to focus on first. Honestly, sometimes less really is more.

3. Gather Data

For segmentation approaches, you will need to gather and analyze data about your customers. 

Examples of ways to gather this information include:

• Pulling from purchasing data, including product or service purchased or geographic location of the buyer.
• Discovering initiating resources or how your customer found your website (what led them to you).
• Finding out opt-in source.
• Examining demographic data input by the customers themselves.
• Utilizing surveys, interviews, or focus groups.

4. Determine Best Ways to Target Customer Segments

With segmentation completed, next up is determining the best ways to target those customers. 

This may include customizing content to boost brand awareness or educate your customer segment about your product or service.

Along with targeting, you need to find the best way to reach those customers, whether it be through a particular social media platform, email campaign, or other content channels.

5. Conduct Analysis of Your Efforts

After implementing your segmentation marketing strategy, go back and analyze your efforts and results to gain beneficial insights.

By doing so, you can refine, update, replace, or better optimize your approach.

6 Customer Segmentation Tools

There are numerous online tools available today to help with the customer segmentation process. Here are 6 in particular that can aid your approach.

1. Google Analytics

Google Analytics can monitor your overall website traffic, and this can help you discover the demographics and behaviors surrounding your visitors. In turn, you can determine the best ways to segment them into groups.

2. HubSpot

HubSpot provides a host of tools you can utilize in your segmentation efforts, such as contact scoring, contact lists (both static and active), event-based segmentation, and more.

3. Experian

Build, view, and even manage your customer segments within Experian. At the heart of this tool is a focus on data, that is, collecting, combining, and analyzing it to achieve a greater understating of customers with an eye on meeting their needs. 

One example of their offerings is lifestyle segmentation, identifying the habits and preferences of customers.

4. Qualtrics

Qualtrics is a software that provides segmentation tools based on the actions of your customers and the insights gained from these. Within this software, you can organize customer groups and determine the best communication methods. 

With its AI and machine learning capabilities, it can also help you find new ways to undergo customer segmentation.

5. Sprout Social

It’s unwise to leave out social media in a marketing strategy these days. Sprout Social can help by making it easier for you to create and share various messages through what they call Audience Targeting on both Facebook and LinkedIn.

6. Mailchimp

Mailchimp continues to be a useful tool for marketing teams in a variety of ways. As a customer segmentation tool, it can assist with better management of customized, segmented email campaigns.

Customer Segmentation Examples

Several customer segmentation examples are available to guide you in your decision-making process and when it comes to incorporating the different segments into your overall digital marketing strategy.

Below are several of these examples to help get you on the right track, including demographic, geographic, psychographic, and technographic ones.

1. Gender (Demographic)

Depending on what services or products you offer, customer segmentation by gender may be beneficial. Take a look at who your customers are and determine if it makes sense to use gender as a grouping factor for marketing efforts.

2. Age (Demographic)

Age is by far one of the most common factors used in segmentation approaches. A customer’s age or age range can provide important information, such as individual budgets, financial priorities at certain stages of life, and more.

3. Occupation (Demographic)

A consumer’s occupation provides you with information not only on career choices but also about their interests and income.

4. Location (Geographic)

The location of your customers is an important factor, alerting you to where they reside and the different approaches to take. Your marketing messages will most likely differ for those who live in New York City versus those in beach communities in Florida.

5. Transportation (Geographic)

A less obvious factor to use in customer segmentation marketing is transportation. You may find that your customers often take buses or subways, and this can benefit from direct marketing (e.g., ad signage on buses or at subway stations). For those customers found walking, such as in big cities, guerilla marketing techniques may be successful.

6. Lifecycle Stage (Behavioral)

Knowing where your customers are in their buyer’s journey is another segmentation possibility. This information provides you with clues as to how to approach them where they are, whether that is in the awareness, consideration, or decision stage.

7. Interests (Psychographic)

By grasping what the interests are of a customer segment, whether they relate directly to your product or service or not, you can find ways to get their attention. For instance, if your customers are outdoor exercise enthusiasts, you may choose to partner with another business or cross-promote your products with an outdoor shoe or hiking store or company.

8. Original Source (Technographic)

Knowing how your customers found you is another good source of information to segment customers. Original source data informs you of how visitors got to your website. 

Was it due to your SEO efforts and ranking high up on search results on Google? Did another website refer them to you, or did they read one of your guest posts somewhere? 

Once you know, you can concentrate on how to attract more people and optimize the path they need to take to get to you.

Wrap Up

When it comes to your marketing strategy, the customer needs to be front and center.

Instead of focusing on the masses, you’ll benefit from segmenting customers into groups that can be targeted with specific marketing tactics.

Customer segmentation allows you to learn more about your customers, help you tailor and customize content more effectively, create successful targeted campaigns, increase customer loyalty, and help you find the right platforms and channels to reach the most people. 

There are many ways to break your customers out into groups. Once you find what works best for your brand, you can then create buyer personas to guide you, then follow each one along their customer’s journey path to know what to do next.

}}