What does customer segmentation involve?

Customer segmentation involves dividing a customer base into groups with similar characteristics, which allows businesses to tailor their marketing strategies and product offerings to meet the specific needs and preferences of different segments. This practice enables retailers to focus their efforts on the most profitable customer groups, enhancing customer satisfaction and loyalty by addressing the unique demands of each segment.

Segmentation can be based on various criteria, including demographics, psychographics, behaviors, or geographic locations. By understanding these segments, businesses can create targeted campaigns that resonate more effectively with customers, leading to improved engagement and conversion rates. This approach is far more efficient than a one-size-fits-all marketing strategy, as it recognizes the diversity among customers and aims to meet their specific desires and needs.