Customer segmentation
Customer segmentation is the practice of dividing a customer base into groups that share meaningful attributes, needs or behaviours, so each group can be served and prioritised differently.
Also known as Market segmentation, User segmentation
What are common ways to segment customers?
By firmographics (company size, industry), demographics (role, region), behaviour (how they use the product), needs (the job they are hiring you for), or value (revenue and retention). Behaviour and needs-based segments tend to be the most actionable.
Why does segmentation matter?
A single average customer does not exist. Segmentation lets you concentrate on the groups that matter most, tailor your messaging, and avoid building a product that tries to please everyone and lands with no one.
How does segmentation relate to personas?
Segments are the analytical layer; personas are the human layer. You segment to decide where to focus, then build personas to make the priority segments concrete for the people doing the work.
Put it into practice
Customer segmentation, in brief
Customer segmentation is dividing a customer base into groups that share attributes, needs or behaviours, so each group can be prioritised, served and messaged to differently.
Segmentation groups customers analytically; a persona turns a priority segment into a single, humanised profile that a team can design and sell to.
Related terms
- Customer personaA customer persona is a research-based profile of a target customer that captures their goals, behaviours, pain points and context, so teams can make decisions with a specific person in mind.Read more
- Customer insightA customer insight is a non-obvious, evidence-backed understanding of customer behaviour or motivation that can change a decision, distinct from a raw data point or a single piece of feedback.Read more
- Product-market fitProduct-market fit is the point at which a product satisfies a strong market demand so well that customers adopt, stay and recommend it, and demand begins to pull the business forward.Read more
- Ideal customer profileAn ideal customer profile (ICP) describes the type of company that gets the most value from your product and is most valuable to you in return, defined by attributes like size, industry, situation and the problem it needs solved.Read more
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