By M. Isi Eromosele

Customer segmentation is the ability to identify high value customer groups within a marketplace. This segmentation is based on the principle that not all customers are equivalent.

Some customers are highly profitable; others are borderline profitable and a final group are basically unprofitable for your company.

With the use of segmentation, your company can speak to the needs and interests of divergent groups of customers. Determination can be made as to whether there is a products/services fit in a high opportunity segment. Product enhancements or new products with customized qualities may be aimed to targeted groups.

Certainly, segmentation does not mean that one customer group is favored over another. It does enable your company to craft micro marketing strategies that succeed with multiple customer segments.

Market segments provide foundations for sustained lasting growth and profits at your company.

There is one overarching objective in implementing customer segmentation. This is the identification of groups of like-minded customers that can then be differentiated from other customer segments.

In a well designed segmentation program, customers in each segment should have similar interests, purchase attitudes and behaviors. Their response to components of a marketing mix and sales channel promotions should be comparable.

Ordinarily, consumer markets consist of general customers and prospects with different wants, needs, perceptions as well as purchasing interests. After applying segmentation, a company can customize specific marketing tactics for each customer segment.

Customer behavior can be derived from many changeable human factors including buying habits, demographics, income level, tastes and media preference. Collection of customer data is imperative to the success of market segmentation.

A well executed customer segmentation program will provide a sound structure for your company’s umbrella marketing strategy. This will give you the framework to better understand your markets to a granular level.

The result will be a well coordinated plan which will aim to enhance your company’s performance in all your targeted market segments. The critical success factors for market improvements include market share, customer acquisition, customer retention, level of profitability and customer satisfaction.

The four major benefits in implementing customer segmentation are:

• Analytical information that helps to discover opportunities within each customer segment
• Increased customer retention levels within each customer segment
• Enabling customized marketing plans for each customer segment
• Enhanced products/services fit within each customer segment

In a continually competitive business environment, companies need to accelerate their capabilities for acquiring and retaining of customers, especially the high-value ones.

Customer segmentation is crucial to the implementation of a successful marketing strategy that will result in long-term growth and increased profits for your company.

M. Isi Eromosele is the President | Chief Executive Officer | Executive Creative Director of Oseme Group - Oseme Creative | Oseme Consulting | Oseme Finance

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