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What Is Customer Segmentation Software And How To Use It?

What Is Customer Segmentation Software And How To Use It?

Have you ever thought about why a marketing strategy does not work for every customer? The answer is simple, there are different needs and wants of every customer. So, you should use Customer Segmentation Software to run marketing campaigns keeping in mind the needs and wants of different customers.

With Customer Segmentation, you can know about your customers and target them with personalized messages and marketing campaigns. Personalized campaigns can help to increase sales and get loyal customers.

By targeted personalized messages, you can get ahead of your competition and customers will be more excited to create and maintain a relationship with your business. Now you need to know about a variety of groups of people and find out their communication styles and different needs.

In this guide, you will get to know about all Customer Segmentation, its types, and the best Segmentation Software available. So, without wasting any time let’s deep dive into it.

What is Customer Segmentation Software?

By using Customer Segmentation Software you can classify the groups of people based on their interests, needs, behavior, characteristics, etc. You can easily target these different groups with different marketing strategies.

If you want to get business growth and lots of conversions, then you should use Customer Segmentation Software. Most businesses like eCommerce businesses use this software and create a marketing campaign to target a specific group.

With targeted marketing campaigns they provide a better customer experience and get customer retention which results in better growth of the business.

How does Customer Segmentation Software work?

working of customer segmentation software

Customer Segmentation Software helps to classify the groups of people based on specific demographics and behaviors. With this, you can easily understand your customer and can create a better Marketing campaign to approach.

In simple words, you can create, analyze and integrate data of your customers or existing clients to target precisely and provide a better customer experience. This helps customer retention and increases the conversion rate for your business.

There are lots of Segmentation Software available by which you can easily classify groups of your customer base. In my opinion, for a better understanding and better targeting approach, you must use the software. We have listed some best Segmentation Software. So, keep reading.

Types of Customer Segmentation

Small-sized businesses with fewer customers aren’t able to classify their customer base based on essential data. It may be due to a lack of data and software or skills to analyze what every customer wants.

On the other hand, large-scale businesses like eCommerce businesses always work to promote their business and increase sales. So, they follow all necessary data of their customer base to create personalized campaigns and provide a better customer experience.

So, Customer Segmentation depends on the different types of data we collect from our customers. Let’s know all about them.

1. Behavioral Segmentation

As the name suggests, this type of segmentation gets to know about the behavior of the customers to provide them better user experience. It is the most effective way by which you can easily target your specific audience and get more conversions for your business.

The behavior of customers like how they think and react when they know about a product or its services. By getting to know about it, we can easily get the data about what customers actually want. So, we can create a personalized marketing campaign to target customers.

Lots of companies use Behavioral Segmentation because of features like:

  • This data is very useful
  • This data is easy to collect
  • You can use behavior data to create better marketing campaigns

2. Demographic Segmentation

With Demographic Segmentation, you can easily classify your customer based on demographic variables. These variables refer to a group of people, not to the specific or individual.

Some demographic variables are:

  • Sex
  • Age
  • Marital status
  • Language
  • Income
  • Nationality
  • Religion
  • Education

All these factors are necessary to create different groups with different identities. You can categorize your customers based on these variables very easily and without any cost. That’s why most businesses like this segmentation.

While doing demographic segmenting, keep in mind that it is not necessary that the people of a group having the same age will like the same product or services. You can see this as a limitation of this type of Segmentation. So, classify the groups wisely.

3. Psychographic Segmentation

Psychographic Segmentation is basically used to classify the groups based on non-physical attributes. This is a very unusual type of segmenting. With this type of segmenting you can create subgroups into the customer base to target a specific audience.

You can do psychographic segmentation based on the elements like:

  • Lifestyle
  • Interests
  • Habits
  • Social status
  • Hobbies

4. Geographic Segmentation

Geographic Segmentation allows to categorize the groups of customer base on the basis of their location. There is a chance that groups of people from similar locations can have similar interests and thoughts about a product.

For example, the peoples of similar villages celebrate a similar festival. On the other hand, people from different villages don’t even know about the festivals which are held in other villages.

So, it is the most effective way of segmenting to create a marketing campaign to target the customers to get an increase in sales.

You can do geographic segmentation on the basis of:

  • Area
  • City
  • Zip Code
  • Country
  • State

With its benefits, it will not help you to grow your business if you only focus on geographic segmentation. You should follow the combination of segmenting to better get the idea about the customers otherwise it will be a waste of time.

5. Technographic Segmentation

With technographic segmentation, you can classify the groups according to the devices they used. This is also the most effective way of segmenting by which you can know how many people are using a particular device. So, you target them easily by creating a better marketing campaign.

If you don’t understand, let’s take an example, if you have a business of digital products and create a marketing campaign of all products to target all customers, what do you think will work, simple no. You need to create a marketing campaign with different strategies for different groups.

You can do technographic segmentation based on the factors like:

  • Mobile use
  • Desktop use
  • Softwares
  • Apps

How to create a Customer Segmentation Strategy?

You can easily create a customer segmentation strategy in four ways:

1. Select your goals

First of all, you have to determine your goals about what you are looking for by segmenting the customers that will help your marketing campaign.

You can think about why you have to choose to do customer segmentation. All businesses have specific goals for their marketing campaign so they can easily do customer segmentation.

So, if you find a specific goal for your business then write it down and focus on that. But, keep in mind that customer Segmentation does not fit all groups and every business.

2. Segment Customers into groups

After you have found out what you want from the customer segmentation, now you need to segment customers into groups by following different models we have listed before.

Choose a Segmentation model according to the size, and location of your business. But keep in mind some models aren’t helpful if they can only be applied to target the customers.

3. Target your Customer Segments

After you have done Customer Segmentation, the next step is to target your customers. You need to know on what basis you want to target customer segments. You can choose from a specific department like marketing, sales, and service.

With Marketing, you can customize content to attract customers for getting leads, and increase brand awareness.

With Sales, you can get easy ways to communicate with the customers to increase sales.

By using Service, you can provide materials and resources to solve the problems of customers.

4. Do Analysis

In the last step, you need to analyze the customer Segmentation to check if this really works or not to target customers with marketing campaigns.

You can edit and update your customer segmentation if it doesn’t work properly. So how you will know if any problem occurred. You can take feedback from the customers to know if they are segmented into appropriate groups or need some change.

Doing some experiments in segmenting the customers into different groups can also help your business to get conversions.

After updating, you need to analyze it again. So, it is not a one-time process you have to perform regularly.

Why is Customer Segmentation important?

There are various reasons to know why customer Segmentation is important. All the reasons help to grow your business.

So, let’s know what are the main reasons:

  • With segmentation, you can increase customer loyalty
  • You can communicate with different types of customer segments
  • You can optimize your customer service to provide better solutions to the customers
  • With segmentation, you can edit your content to match the needs of customers
  • You can find a new opportunity for your products, service, and support to grow your business

So, these are the basic and important reasons which are required by every business.

Factors to consider for Best Customer Segmentation Software

Now you need to select the best Customer Segmentation Software for the growth of your business.

There are important factors to consider:

Organization

You need to choose software that can allow you to collect all the data of your customers by which you can plan your actions and make some changes if required.

Easy to use

If you have a medium-sized business, then you need software that is easy to use. I know no one wants to spend their time learning how to use the software. On the other hand, if you have a large business and a team of professionals then you can go for high-end software with complex usage.

Easy to customize

The Customer Segmentation Software should be customizable to make some required changes according to the business. It is because any software can’t be created by focusing on a particular business, so everyone makes some changes from time to time.

If you want to know more about your customers and create a marketing campaign, then you need flexibility.

Scalability

A good segmentation Software should be scalable with the growth of the business. No one wants to change their software after getting higher growth in their business. So, choose software that provides solutions for every size of business with their different pricing plans.

Best Customer Segmentation Tools available

There are lots of Segmentation Software available.

Some best options are:

1. Experian

Experian, 'best customer segmentation software

Experian, which is the best customer Segmentation Software according to us, provides lots of features like viewing, editing, and managing the segments to match the business requirements.

To create a Customer contact portfolio, you can use lifestyle segmentation and identify economically-valuable groups to get the complete details about your customers.

2. MailChimp

MailChimp, 'best customer segmentation software'

MailChimp also provides a customer segmentation tool that allows you to organize and manage email marketing campaigns with your contacts or targeted customers with messaging.

You can also choose from criteria to target specific groups with tailored messaging.

3. Google Analytics

Google Analytics, 'best customer segmentation software

With Google Analytics you can get the data about your customers like how much time a person spends on a business and where they click. This is the best tool to identify the behavior of customers to create a better marketing campaign and customer retention.

If you are a beginner, you can’t use this easily as it is complex. Even professionals don’t use this too much because it provides lots of data that is hard to understand.

4. Twilio Segment

Twilio Segment, 'best customer segmentation software'

Twilio Segment is also the best Customer Segmentation tool available which allows you to get lots of customer data. With data, you can get lots of customers to target them with your marketing campaign. If you have a large business, then this tool will work perfectly for you.

But keep in mind its price can change your mind to not choose it. As a guide, I will suggest that if you are a beginner don’t go for it, you can use the other options we have listed and if you don’t mind spending money then you can use it freely.

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Wrapping Up

Now you know what Customer Segmentation Software is, its types, and the best Segmentation Software available. As we discussed earlier, Segmentation is very necessary to target customers more precisely.

With segmentation, you can create groups of your customer based on behavior, interests, lifestyle, etc. You can perform a segmentation process by using the best tools we have listed before. Some tools are complex and some are easy to use, so choose wisely to match with your business requirements.

We hope you got the best information from our side and enjoyed this post. We will back again with our next topic.

Frequently Asked Questions

How does Customer Segmentation help to grow business?

If you want to get business growth and lots of conversions, then you should use Customer Segmentation Software. Most businesses like eCommerce businesses use this software and create a marketing campaign to target a specific group.

Which is the main factor to consider while choosing the best Customer Segmentation Software?

In my opinion, the Customer Segmentation Software should be customizable to make some required changes according to the business. It is because any software can’t be created by focusing on a particular business, so everyone makes some changes from time to time.

Which is the best Customer Segmentation Software?

According to us, Experian is the best customer Segmentation Software that provides lots of features like viewing, editing, and managing the segments to match the business requirements.

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