Customer segmentation plays a vital role in orienting efforts and rescources. Aiming marketing spend to improve effectiveness. Allowing product management to put a face on personas to better understand their needs. Targeting the right type of customers and realistic forecasting.
Better understanding your current customers helps you to do more or better business with them. It allows you to define the areas of growth and address these with specific campaigns. To enlarge your market share or enter new markets by finding white spots, blue oceans and other opportunities.
Investing purchase data on recency (last purchase), frequency (how regular) and monetary (how much) is a straightforward manner of segmenting customers. There is little interpretation in there which makes it a solid base for further actions. In all varieties of scoring on these three elements you can attribute a category (for example well below avarage on all three; dormant customers, wake them up or losing them).
Differentiating in customer approach can help you save money by not offering useless promotions or help you grow by applying the right advantages to your most growable customers and assuring customer retention by cherishing your most valuable customers.
The most known and popular foundation for customer segmentation is only the first step. It is the start of balancing efforts with result and drive return on investment. Deep understanding and automation allow you to build a customer data-driven organization that prioritizes profit by default.