Definition of Customer Segmentation
The process of dividing a customer base into groups of individuals based on similar characteristics.
Explanation of Customer Segmentation
Customer segmentation is the process of dividing a broad customer base into smaller, more manageable groups based on shared characteristics or behaviors. These segments can be based on demographics, geographic location, psychographics, purchase history, or other criteria. By segmenting customers, businesses can tailor their marketing efforts, products, and services to meet the specific needs and preferences of each group. This targeted approach leads to more effective and personalized communication, higher engagement, and increased conversions. Customer segmentation helps companies optimize their resources, improve customer satisfaction, and achieve better results from their marketing and sales strategies.