Understanding customer segmentation

Customer segmentation is the practice of classifying customers into groups based on shared traits so that businesses may effectively and appropriately market to each group. In business-to-business (B2B) marketing, a firm may divide its clientele into several groups based on a variety of criteria, such as location, industry, the number of employees, and previous purchases of the company’s goods.

Businesses frequently divide their clientele into segments based on demographics such as age, gender, marital status, location (urban, suburban, or rural), and life stage (single, married, divorced, empty nester, retired). Customer segmentation calls for a business to collect data about its customers, evaluate it, and look for trends that may be utilized to establish segments.

Job title, location, and products purchased—for example—are some of the details that can be learned from purchasing data to help businesses to learn about...