Customer Segmentation

The first step involves understanding the overall customer base. This can be achieved through customer segmentation and in depth analysis on each segment of the population.

Segmentation is the process of dividing a broad customer or business market, normally consisting of existing and potential customers, into sub-groups based on some type of shared characteristics.

Based on the type of business, the two broad categories of segmentation -

  • B2B Segmentation
  • B2C Segmentation

B2B Segmentation

The target market for any B2B product or service is not one homogeneous mass. Rather, it can be divided into several distinct groups based on who they are, how they behave, what they want or what they think. In the Campaign to Closure solution, we have 3 main approaches to B2B segmentation:

  • A priori segmentation (Firmographic): We use a classification scheme based on publicly available characteristics — such as industry and company size — to create distinct groups of customers within a market. However, we have observed that companies in the same industry and of the same size may have very different needs.
  • Needs-based segmentation: We use differentiated and validated drivers that customers express for a specific product or service being offered. These needs are discovered and verified through primary market research.
  • Value-based segmentation: Here, we differentiate customers by their economic value - grouping customers with the same value level into individual segments that can be distinctly targeted.

 B2C Segmentation

Similarly, we have four basic segmentation approaches for B2C Segmentation -

  • Demographic segmentation: This is the B2C version of firmographics. Demographic segmentation divides customers based on aspects such as age, gender, education, occupation, income, marital status etc.
  • Geographic segmentation: Here, we group customers based on geographic location. It allows companies to focus the products and services offered to different segments based on where they are located.
  • Behavioral segmentation: In behavioral segmentation, we divide customers based on attributes such as brand loyalty, awareness, knowledge, social media interaction and purchasing patterns. Although it is difficult to implement, it allows for precisely targeted marketing messages.
  • Psychographic segmentation: In this approach, we group customers based on personality, lifestyle, values and social class. Similar to behavioral segmentation, this can be difficult to implement, but the payoff in precise marketing is significant.

Now that we have familiarized ourselves with the different types of segmentations, let’s dive deeper into the practical aspects of how we implementation them.


Based on the our client’s business requirements, availability of data and feasibility, we have either choose to

  • Use a suitable off-the-shelf segmentation solution
  • Use a customized version of the off-the-shelf segmentation solution
  • Implemented our own segmentation solution

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