Customer segmentation studies aim to divide markets or customers into smaller groups or personas with similar characteristics to enable targeted marketing. By understanding how people in each category behave, you can understand how each influences revenue.
As soon as you’re ready to start giving customers individualized experiences. Not every customer in your target market is the same. The more you understand each specific persona, the easier it is to focus on delivering personalized marketing, build loyal relations, price products effectively, and forecast how new products and services will perform in each segment.
Market researchers use four characteristics to segment customers:
- Demographics. Demographic information such as age, gender, family status, education, household income, occupation, and so on.
- Geography. Where people live, from cities and countries to whether they are city dwellers or suburbanites.
- Psychographics. Socioeconomic status, class, lifestyle, personality traits, generation, interests, hobbies, etc.
- Behaviour. Brand affinity, consumption and shopping habits, spending, etc.
A researcher will identify your current customers and collect data about them through various market research methods, such as surveys, database research, website analytics, interviews, and focus groups. The aim is to gather as much information as possible.