Customer Segmentation
What is Customer Segmentation? Customer segmentation refers to the process of dividing the customers of a business into groups. The groups are built based on the similarity among customers, the products and services they avail, retention rates, etc. Customer segmentation mechanisms are concerned with understanding different types of customers, and catering to the different needs. Customer segmentation is of growing importance due to the increase in alternatives for a single product. Customers have different needs, and unless businesses adapt to their needs, customers may find other options that serve them better. Customer segmentation tools can help increase customer loyalty, reduce marketing costs, increase conversion rates and sales. In addition, it helps in maximising the value of each customer to the business. It is used by various business sectors, like car companies, media, skincare and beauty, and retail, and can be based on demography, geography, behaviour and other facto...