The benefits of customer segmentation

Each client is different. And each client is expecting a unique and personal experience. When a brand can identify its users, by behaviour and purchasing preferences, the relationship with them can improve notably, driving good results for brand awareness, engagement and sales.

For example, a brand can have a group of similar users in terms of demographics (age, gender), and location. However, this group could have users who only buy during sales or users looking for specific products. They are alike but not the same, and their interests and interaction with the brand are different. It is here when personalisation platforms and a proper customer segmentation come to play.

What the consumer wants

Companies that use customer segmentation operate under the fact that each user will respond positively and buy something if the message is relevant and focusing on their own needs. Besides, segmentation can also help companies to discover what each segment considers most valuable to adapt their messages accurately.

In addition to demographic, geographic and psychographic data such as age, location and lifestyle, personalisation platforms are able to use an even more effective segmentation: behavioural. What a consumer does when visiting a website says a lot about who it is. From what it looks for or how much it spends, to the interaction with the brand, and its expectations.

The brands that combine all the segments mentioned above to adapt and improve their strategy and relationship with consumers, could see a faster and more effective return on investment and increase in their conversion rate. Additionally, brand loyalty and customer retention could be boosted.    

Advantages of segmentation

Personalisation

Talking to consumers about what it is important to them is becoming mandatory for any company that intends to remain competitive. Today is not enough to include the user’s name in the newsletter and call it “personalisation”. Users expect to have their wishes and needs addressed individually.

Client retention

By using segmentation, customer retention can be encouraged. When consumers feel that a brand listen and interacts with them, providing relevant messages, they will not only return but will probably recommend the brand to their acquaintances.

Improves communication

Segmentation leads to generating personalised messages that are relevant to a specific group of consumers. By speaking to them, they will be willing to listen to you, share their opinion or buy what you are offering. Improving the relationship with your clients is the best way to retain them, acquire new ones and improve long-term results.

Increase in competitiveness

Naturally, once you increase your focus, you will increase your competitiveness in that market segment. If you are doing it right, brand awareness and brand loyalty will improve too. In this way, market segmentation also increases the competitiveness of a company from a holistic perspective.

Market expansion

It is not only geographical expansion but also opportunities in the market. For example, a sports shoe brand that usually targets fitness lovers can also relate to users who are looking for sports clothes, but not necessarily are interested in sports. With the appropriate segmentation, the brand can expand its radius of action and reach a whole new group of consumers.