Using Customer Segmentation To Increase Satisfaction

By Devin Partida, ReHack.com

IT professionals working toward a better marketing strategy must learn about customer segmentation. Mass marketing is most effective for enormous brands, so those working for smaller shops should find ways to make their tactics more effective. More people crave the personalization brick-and-mortar stores can offer them, especially in the digital age.

Over one-third of customers say they want a more personal shopping experience, but many do not wish to share their information with companies. How are IT professionals in retail meant to give their consumers what they want? Here’s how customer segmentation can provide satisfaction and profits.

What Is Customer Segmentation?

Before diving into its uses, some might need to learn more about this marketing tactic.

Customer segmentation — or market segmentation — means breaking a store’s total consumer base into manageable parts. Each group will have some related characteristics without getting too detailed. This allows businesses to make a shopping and advertising experience more personal despite lacking a single consumer’s complete data.

The process of segmenting customers often relies on demographics to narrow down groups. Some of the common sections companies can use are:

• Location and language
• Marital status
• Age
• Gender
• Education or income level

IT professionals can use this data to create a customer profile. These profiles are helpful for them and the marketing team when developing targeted advertisements and experiences.

How Customer Segmentation Can Benefit Retail

Many consumers want a personal-feeling experience without telling a retailer everything about them, and this strategy provides a happy medium. Customers get the shopping or marketing they want, and retailers benefit from their satisfaction. IT professionals that assess shoppers’ potential needs and advertise in a way that appeals to them create a win-win situation.

Many researchers also note that customer segmentation increases profits. As many professionals know, happy consumers are more willing to buy from a business. Some companies saw a 40% increase in sales, while others noticed a 200% improvement in conversions when utilizing good segmentation. Effective marketing can attract more customers and make them more likely to convert.

Customer segmentation can help companies spend less on marketing as well. They’ll need to do more research, but businesses will reduce how much money goes into ineffective upgrades and advertising. Companies that target the consumers they want increases their chances of attraction, conversion, and retention.

Retail And Customer Segmentation Strategies

Effective personalized marketing makes customers happier, raises profits, and reduces spending. How can IT professionals start using it in retail?

• Personalize Email Campaigns

Once the business has segmented its customers into demographic groups, it can start releasing targeted emails to generate leads. Think about it — someone who bought a cookbook might be confused about why they’re getting a message about the latest young-adult thriller.

On the contrary, someone who just picked up lumber from the hardware store might be thrilled to see there’s a discount on nails and screws next week. Companies that identify people’s interests based on their buying history can tailor their campaigns for effectiveness.

• Collect Feedback

One of the most vital parts of retaining customers is getting their feedback. After someone buys something in person or online, businesses can give that person a form to fill out. They can accomplish this by putting a QR code on the receipt or sending an email.

The company can use the feedback form to see what the shopper enjoyed about their experience. IT professionals that collect this data can adjust their customer profiles to better suit consumer needs. This will make for better marketing and potentially increase the chances of retention.

• Reach Out To Unengaged Consumers

Feedback could expand to become part of a business’s customer profile. What makes this demographic less active than usual? What kind of services or products make them more interested in purchasing?

Companies can identify which consumers haven’t bought from them in a while. If they notice it’s one section of their demographic, they could try sending out a coupon and seeing whether that increases engagement. They could also survey a broad group to find out how the customer’s purchase is working for them and if they can do anything to improve their experience.

Use Customer Segmentation For Consumer Satisfaction

IT professionals can reap the benefits of customer segmentation by creating more targeted advertisements and experiences. Personalized marketing in retail can increase consumer happiness and business income.

About The Author

Devin Partida is a writer and blogger interested in retail technologies and business solutions. To read more from Devin, visit ReHack.com, where she is the Editor-in-Chief.