What is Customer Segmentation?

In the first clip of Resilience: An Elearning Series For Ecommerce Brands In 2021, Allison covers the basic components of customer segmentation. Learn how companies can categorize and segment their customers by attributes such as demographics, psychographics, purchase patterns, geography, and more.

You’ll also learn why using data-driven approaches within your own customer data is better than trying to apply market research to your customers when you want to understand them at an individual level.

What is Customer Segmentation?

Simply put, customer segmentation is the act of dividing customers into groups based on common characteristics.

How Customers are Typically Segmented (and why it's Wrong):

Commonly, brands primarily segment their customers into groups via demographics (ex: age or sex), psychographics (ex: interests or beliefs), or geography. The benefit of these forms of segmentation is that they are often easy to use for targeted marketing campaigns.

However, using these types of data to segment and market to customers differently often times drives spotty results (at best!), as the data isn't applicable to individualized relationships.

Through our decades of experience working with direct-to-consumer brands, we've found that, for this reason, demographic, psychographic, and geographic data is best used for market research and not segmenting customers.