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Understand Your B2B and B2C Customers Through Customer Segmentation
Do you market to all of your customers and prospects similarly? Do they all receive the same marketing message and at the same time? If your answer is yes, you should learn about customer behavioral segmentation.
In the newsletter, Effectively Linking Customer Segmentation to Profitability, Marriott International is described as a business selling hotel rooms; however, what sets them apart from their competition is their keen awareness that customer needs differ by convenience to airports, price sensitivity (economy verses luxury), and length of stay. Essentially, they’ve segmented their customers and built brands (even purchased brands) around each customer segment to maximize Marriott’s profits.
Customer Behavioral Segmentation is the process of grouping customers by their demographic, personality, and buying characteristics. Customers in the same segment are maximally similar to one another, while different segments are maximally different from one another. Whether you are a B2B or B2C business, segmentation can have a useful function in your business strategy and marketing effort.
B2B Example. Recently, a large US eye-wear organization wanted to open new stores but didn’t really know how many segments of stores they had, nor the characteristics of these segments. The stores were surveyed and a segmentation analysis performed. The benefit of the five segment solution was the understanding of typical characteristics of each segment, allowing them to locate, select the square footage, and stock the new stores appropriately.
B2C Example. A B2C organization in this analysis shows how their customers could be segmented into categories based on customers’ age, gender, income, etc. The benefit of the analyses was that the organization sent a different message to each segment and expected a greater response rate based on an offer that most closely matched their customers’ needs.
Based on Customer Behavioral Segmentation analysis, you understand the number of distinct segments and a description of the segments. This information can help you message uniquely to that segment and develop new services and products to meet the needs of each segment.
Deliverables
- Derive the number of distinct segments in your customer or business database;
- Assign a segment number to each customer or business, and message them uniquely;
- Define the characteristics of each segment;
- Write-up of findings, verbal explanation, and recommendations.
Whitepaper: Campaign Optimization Through Customer Segmentation