Loyalty and Retention

Customer Segmentation: How To Perfect Your Segmentation Strategy For Real Growth

October 12, 2022
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Trying to target 60-year-old Larry and 22-year-old Harry in the same way, is often a recipe for disaster.

Marketing in the modern age needs to be quite personal to be effective; it has to feel like it's made just for you.

So how do you create marketing efforts that are not just broad strokes trying to target anyone who would be interested in your business?

Through customer segmentation, of course.

Customer segmentation can be one of the most powerful tools for growth, giving you the power to target each segment of your customer base in a way that is cohesive and congruent with them.

Give Larry his nostalgic feels on his Facebook feed and hit Harry with the new school vibes in a fire Instagram reel.

Used correctly, customer segmentation can drastically improve the ROI of all your marketing efforts while also improving customer loyalty.First, let’s answer a really important question:

What is customer segmentation?

Hubspot defines Customer Segmentation as the following:

Customer segmentation is the process of separating your customers into groups based on the certain traits they share.

Segmentation offers a simple way of organizing and managing your company's relationships with your customers. This process also makes it easy to tailor and personalize your marketing, service, and sales efforts to the needs of specific groups. This helps boost customer loyalty and conversions.

The process of segmenting your customers is centered around four different key areas:

  1. Demographic
  2. Geographic
  3. Psychographic
  4. Behavioral

Utilizing a combination of these four categories you create different segments that customers fit into. This allows you to narrow the wide range of individuals that interact with your business frequently into smaller categories. It may be obvious by this point, but customer segmentation is not only useful for marketing efforts. Through the process of understanding these four areas, you gain a deeper and sharper awareness of the market you operate in, the clients in that market, and your competitors.Let's look at the actual process of segmenting your audience.

Overview of the process

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The process of customer segmentation is a 5 step process (unless you're a Gameball user, in which case we make it so simple and efficient that it's basically a 2-step process 😉).

Let's break them down:

  1. Collect customer data

    This process can take various forms, and instead of making this article super lengthy, we'll refer you to this excellent Shopify article summarizing the process.
  2. Create main customer profiles

    Once you have your customer data, you can see the information about each customer from the four key areas. This can then be used to create in-depth customer profiles. An excellent article to check out on the process of creating customer profiles is this one from Hubspot.
  3. Determine main segmentation characteristics

    Once you have your customer profiles, determine the characteristics of each segment. Ask yourself the two following questions as guiding points:

    A) What different customers are similar enough to be in categories together?
    B) What customer segments are most aligned with your business goals?
  4. Divide customer base into different segments

    Once the criteria for the segments have been determined, manually segment your customer base or use a tool like our powerful AI-based segmentation. Our AI-assisted segmentation allows you to define the criteria for each segment and allow the AI to segment your user base into those automatically.
  5. Target customers based on segments for more growth

    Let's dive a little deeper and explore the ways you can do this:

How customer segmentation can be used to grow

Saving the best for last, the juicy feast. What do you do with these customer segments now that you have them, and how do you leverage this powerful tool to grow?

  1. Segment-Based Marketing

    The first way to utilize segmentation is to tailor different marketing campaigns to different segments. This allows you to fully customize the campaign to the exact specifications of that segment, everything from; the tone of voice, imaging, product shots, and literally anything imaginable. The power of this cannot be understated. It allows for a completely customized marketing experience that will boost sales and conversions across the different segments dramatically.
  2. Segment-Based Rewarding

    Going layers deeper, you can begin to offer different rewards and benefits to different segments. Each segment will have different needs, wants, and desires; by tailoring the rewards and benefits offered, you will improve customer loyalty and, ultimately, conversions. Not to mention, when customers feel like they're getting the royal treatment, they'll be recommending all their friends to your business!
  3. Segment-Based Messaging

    Last but certainly not least, the power of sending segment-based messages that really focus on the type of language that each segment will respond to cannot be overstated. The difference between formal and sophisticated messaging for a segment of Baby Boomers vs. a laid-back and casual tone for Millenials. This change can be the difference between messaging that generates massive sales and conversions or messaging that flops completely.

So what are you waiting for? Get segmenting!
Better yet, get Gameball and have one of the most powerful tools for segmenting and targeting in your arsenal.

We'll catch you in the next blog post ✨

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