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What is customer segmentation?
Customer segmentation is a process of discovering groups of customers that have common characteristics. Grouping their customers, companies can better understand their specific needs and preferences and as such, create customized sales strategies, service levels, ... rather than treating them all the same.
Creating customer segments requires collecting information such as:
- Socio-demographic characteristics
- Customer behavior
- Sales history
By combining all the information available, we can apply a machine learning technique called cluster analysis. This technique discovers segments with similar characteristics and as such, creates customer groups.
Why do we perform customer segmentation?
By performing customer segmentation, we can support companies in how they approach their customer base. This can lead to tailored customer interactions and serve more efficient marketing, personalized sales strategies, improved customer retention, better strategic decisions and efficient resource allocation.
Contact us for more information on how to implement customer segmentation and stay one step ahead of your competition.