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What is segmentation?

market segmentation

Today, we are going to look at an expression that we have mentioned quite often: Segmentation.

Whilst this a term that could be used across many areas of business, it is very commonly associated with customers.

So, what does it actually mean?

This is the process for you to separate your customers into different groups. There are lots of different ways for you to do this:

  • Age/sex/ethnicity/religion
  • Geographic location
  • Specific needs – this can be anything, such as dietary requirements, mobility needs or something very targeted such as very slim boys for a children’s clothing shop
  • Buying habits – this applies to any aspect of buying – specific products purchased together, payment method, when purchases are made – you get the idea!
  • Income levels
  • Interests/hobbies
  • Business versus consumer
  • Trade versus private

We’re sure you can think of other ways, but the ideas above cover most of the ways customers are separated into groups by companies. In essence, you can separate customers by any traits that they have in common.

However, the caveat is that these groups need to be meaningful. Segments of one, two or three people are just not going to work. You need to have sufficient people within a group, or segment, to make it worth you focusing on it – in a way that is profitable for your business.

Of course, how you do it, and then what you do, when you have done it, is another matter entirely…

Contact us on 01256 83 11 10, if you need help with segmenting your customer database.