Customer segmentation allows your business to reap the benefits of focussed marketing effort which helps in reducing marketing cost. It presents better opportunities to develop your product and make it personalized (Customers express more interest in purchasing personalized) and most prominently helps you with more happy customers. Most of the small and medium-sized retailers rely on instincts while creating a segment, this results in the identification of segments with low profit and low customer lifetime value.
Here are a few mistakes to avoid during market segmentation-
Business goals are not considered
Whether it’s attracting new customers or retaining existing customers, your segments have to be in sync with your business goals. The messages sent across should be clear- convincing your existing customers to renew their plans/subscriptions and not trying to persuade them into buying low-cost plans.
Not based on concrete data
Segmentation based on instincts will result in overlooking of profitable customer segments. On top of customer profiles and buying personas, decisions based on actual numbers will improve your return on investment.
Based on limited data
If segments are based on a few data fields and variables, the strategy that comes out of it will be limited by that information. Including new and relevant data fields in your data collection tools will help you achieve better results.
Not considering all the channels
Consider the nature of your product while choosing the communication channels. You may be surprised at the availability of your customers on different media, it is therefore very important to consider all media before arriving at the segments.
Based on erroneous data
Decisions based on erroneous, incomplete and duplicate data will only result in the identification of low-profit segments. Sending two different messages to the same customer will be embarrassing to your brand
To know more on using data accurately for customer segmentation click on- https://getpy.biz/products/