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Customer Segmentation

Why is Customer Segmentation the First Step to Growth and Success for Businesses? Customer Intelligence Experts Discuss

Introduction to Customer Segmentation

With the rising population, growing economies, rapid urbanization, and digitization, companies’ approach to sales, marketing, and product development have transformed to a great extent. Businesses have shifted their strategies to be more consumer-centric and driven toward ensuring customer satisfaction and loyalty. As competition increases, so does the need to attract and retain customers while maintaining mutually beneficial and healthy consumer relationships. These evolving business needs have led to the need for customer segmentation processes across industries.

Customer segmentation is categorizing consumers as per various parameters that may be geographic, demographic, or behavioral. These categories also vary based on the business models of businesses. For instance, B2B business models prefer to categorize their clients on factors such as industry, location, and workforce size. Whereas, in B2C companies, customers are classified according to factors including age, gender, spending behaviors, and value to the brand.

This process has proven highly effective and useful for various departments and functions within companies. It enables targeted marketing initiatives, helps develop well-received products, and improve the value of various customer-centric investments. Leveraging customer segmentation solutions help companies enhance sales, increase customer attraction and retention rates, and maintain healthy consumer relationships. In this article, Infiniti’s customer intelligence experts discuss the significant benefits of customer segmentation in various departments of businesses.

Struggling to engage, attract, and retain customers? Request a free proposal to learn how Infiniti’s customer segmentation solutions can help your business identify and target the ideal customer base for your offerings.

The Benefits of Customer Segmentation

Customer Segmentation

Improved Marketing Initiatives

Segmentation of customers helps marketing teams identify their target consumers and invest in developing efficient, targeted marketing initiatives. In a highly competitive market, ensuring that your business identifies and addresses consumers’ needs better than competitors can be a significant differentiator. Additionally, consumers are more likely to engage with content relevant to their personal needs, demands, and preferences. By identifying consumers’ needs, Infiniti’s customer segmentation solutions help businesses develop improved and targeted marketing initiatives and increase conversion rates with quality leads.

A business requires a strong and loyal customer base to scale and succeed. To learn how Infiniti’s customer segmentation solutions can help your business attain loyal customers, request more information.

Data-Driven Product Development

Developing a novel product that addresses target consumers’ needs can be highly challenging in a rapidly evolving market. Therefore, segmentation of customers and a comprehensive understanding of consumers’ unmet needs, gaps in the market, and particular demographic preferences help businesses develop unique products that address consumers’ demands. A data-driven product development process combined with targeted marketing translates into a successful product launch, improved customer relations, and higher consumer satisfaction. Infiniti’s customer segmentation solutions help businesses developed personalized products and services and reduce ineffective investments.

Increase in ROI

Lastly, customer segmentation enables quality over quantity. Personalized offerings and targeted marketing initiatives lead to acquiring and retaining high-quality leads, increased customer loyalty, and stable growth. While the process requires streamlining the target audience and losing a wider customer base, it enables improved approaches with a higher chance of converting into fruitful transactions or contracts. Targeted marketing initiatives with higher returns lead to a significant ROI and helps businesses maintain a well-informed marketing budget. Additionally, companies avoid investing in the research, development, and launch of products that fail to meet revenue expectations or improve customer attraction and retention. Infiniti’s customer segmentation solutions have helped businesses across industries determine an improved marketing budget, conduct an efficient product development process, and realize significant savings.

Speak with our experts to leverage our expertise in enabling targeted marketing initiatives, data-driven product development, and improved ROI with customer segmentation solutions.

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The Perks of Using Customer Segmentation Analysis in Retail

The retail industry is undergoing a rapid phase of change as brands are increasingly focusing on developing highly personalized customer experiences. Furthermore, the rising market competition has resulted in increasing customer expectations. Customers expect brands to understand their individual needs and provide an exceptional customer experience. To achieve this, retail companies must move on from the one-size-fits-all approach to a more personalized approach in order to cater to different customer needs. This is where the role of customer segmentation analysis comes into play. Customer segmentation analysis in the retail industry involves arranging a broad customer base into smaller subgroups. These subgroups represent a common customer need or goal. Retailers can then formulate strategies to satisfy the needs of each of these customer segments.

It is increasingly important for marketers to send relevant messages that are tailored to the appropriate stage of the purchase funnel. Infiniti’s customer intelligence solutions combine the best data gathering approaches to identify the most profitable customer segments, measure the effectiveness of a marketing campaign, assess changes in customer expectations, and devise value maximization strategies to enhance their shares. Request a free proposal to know more about our customer intelligence solutions.

Benefits of customer segmentation analysis in retail

Customer segmentation analysisRetail marketers are constantly on the lookout for ways to attract more customers by improving the effectiveness of their campaigns. Customer segmentation analysis can help them better plan their marketing strategy. Additionally, having a customer segmentation model also helps retailers understand what offers or product customizations will work with each group of customers.

Individualize customers

Marketing, customer services, and even product development can be made more effective with the help of customer segmentation analysis by giving retailers comprehensive insights about their specific customer groups. Not every shopper has the same expectations from a brand. Without a customer segmentation model that reflect the needs of customers more accurately, retailers often struggle to meet customer expectations.

While most retailers know they need a sophisticated approach to customer segmentation analysis, many still struggle to understand their customer with a 360-degree view. Get in touch with us to know how we help our clients identify target customers, realize factors that drive customers to competitors, gain a clear understanding of budgets and timelines, compare product or service pricing, and also understand customers’ decision-making process.

Collecting smarter data

Customer segmentation analysis not only helps retailers gain a better understanding of their customers, but it also helps them evaluate their own performance. Different metrics relating to marketing campaigns, sales, and other incentive programs can be broken down into different segments based on the customers’ transactional data. Additionally, most cloud-based POS solutions record and update customer data automatically whenever they make a purchase. This information is then synced across all retail locations and connected devices. When grouped into different segments, customers’ spending history can be used to pinpoint the strengths and weaknesses of the marketing campaign and business model as a whole.  Moreover, customer segmentation analysis also provides retailers with a better idea of who buys what, which can be used when expanding products or adding new merchandise.

Enhancing marketing campaigns

One of the biggest advantages of customer segmentation analysis is that it helps in enhancing the marketing campaigns of retail companies. By tracking different customer groups, retailers can analyze different variables that will help them determine ways to attract new customers, build brand loyalty, and create awareness around specific products.

Customer segmentation analysis

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Customer segmentation analysis

Customer Segmentation Analysis Increases Sales Conversion and Reduces Customer Churn for a Retailer – Infiniti Research’s Latest Success Story

Retail Customer Segmentation Analysis

The retail industry has changed dramatically over the past few years. This rapid pace of change has put immense pressure on retail companies to keep up with ever-changing customer expectations. Retail companies have also been forced to identify lucrative customer segments and devise value maximization strategies to boost profitability. This is where customer segmentation analysis comes into play. Customer segmentation analysis helps retail companies to gather comprehensive insights to deepen customer loyalty and pinpoint their marketing strategies.

Customer segmentation analysis can help you precisely define your customers’ needs and create better value for them. Request a FREE brochure to gain detailed insights into our services portfolio and to learn how our customer segmentation analysis will help you assess changes in customer behaviour and measure the effectiveness of a marketing campaign.

Business Challenge

The client is a retail company based out of North America. As the client was new to the US retail market, they were facing difficulties in understanding their customers’ buying preferences, likes and dislikes, and shopping patterns. However, before investing huge capital into the business, the client wanted to gather deeper insights around their target customers to tailor personalized strategies. They also wanted to customize their marketing activities based on their customer behaviour. To do so, the client approached the experts at Infiniti Research to leverage their expertise in customer segmentation analysis.

By leveraging Infiniti’s customer segmentation analysis, the client wanted to:

Improve product and service offerings – By leveraging Infiniti’s customer segmentation analysis, the client wanted to gather relevant data on their customers’ needs to differentiate their product and service offerings. By doing so, the client wanted to enhance customer experience and outpace their competitors.

Enhance revenue – The client realized that putting efforts into the wrong segment can prove to be costly for the company. This can even increase the churn rate and lower upsell potential. The client, therefore, wanted to identify the profitable customer segments and promote their products and services.

Increase sales – With Infiniti’s customer segmentation analysis, the client wanted to specifically target their profitable customers and establish a perfect strategy to drive sales.

Focus on marketing activities – By efficiently segmenting customers into different sub-groups, the client wanted to create customized and focused marketing messages to capture customers’ attention.

Our Approach

To help the client segment the customer base, the experts at Infiniti Research performed customer segmentation analysis. Customer segmentation analysis approach involved segregation of the client’s customer groups into three categories namely – geographic, demographic, and psychographic segments. Also, the experts grouped customers into different segments using insights gathered from the research. The factors such as customer spend, frequency of purchases, channel usage, categories in which customers purchase, discount vs full price shoppers, and margin per customer was taken into consideration while grouping customers into various segments.

Results and Key Offerings

By segmenting customers into different sub-categories, the client was able to gain detailed insights into their customer segments. This helped them to differentiate their products according to customers’ needs. By leveraging Infiniti’s customer segmentation analysis, the client was also able to create targeted advertising and marketing campaigns for different subsets of customers. Furthermore, with customer segmentation analysis, the client increased sales conversion and reduced churn rate by 23%.

KEY FINDINGS AND OUTCOMESInfiniti’s customer segmentation analysis also helped the client to:

Increase competitiveness – By categorizing customers into various sub-categories based on their needs and requirements, the client was able to efficiently cater to their requirements and capture their attention by providing personalized offerings. This helped them to gain a leading edge in the market compared to their competitors.

Increase customer retention – Customer segmentation analysis helped the client to better serve their customer base. This helped the company to increase customer loyalty. Furthermore, this increased customer retention rate and reduced customer churn.

Optimize product price – By gathering detailed insights into the target customer segments, the client was able to efficiently price their products. By optimizing the product price, the client was able to ensure that customers get the most value for their dollars. Also, the client was able to enhance sales and revenues.

Customer segmentation analysis can help you precisely define your customers’ needs and create better value for them. Request a FREE brochure to gain detailed insights into our services portfolio and to learn how our customer segmentation analysis will help you assess changes in customer behaviour and measure the effectiveness of a marketing campaign.

What is customer segmentation analysis?

Customer segmentation analysis is defined as the process of categorizing a company’s customer into various sub-groups based on their characters and requirements. By grouping customers with similar characteristics, companies can easily devise value maximization strategies and create personalized marketing campaigns. Customer segmentation solutions have helped several companies to make strategic business decisions and thereby boost their revenue.

BENEFITS OF CUSTOMER SEGMENTATION ANALYSISWhy customer segmentation is the key to marketing?

In today’s customer-oriented world, the right customer segmentation can help businesses determine the most valuable customers and build marketing campaigns that suit them. In the long run, this will improve your brand loyalty and increase customer engagement. This success story from Infiniti Research describes how a leading transportation services provider was able to achieve these goals with our customer segmentation strategy.

Customer segmentation analysis can help you precisely define your customers’ needs and create better value for them. Request a FREE brochure to gain detailed insights into our services portfolio and to learn how our customer segmentation analysis will help you assess changes in customer behaviour and measure the effectiveness of a marketing campaign.

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