Customer Segments

Introduction

This video illustrates the different aspects of customer segmentation. It starts focusing on customer purchasing power and then shifts to what’s important to customers with a nod toward differences in importance dimensions from industry to industry.

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  • Let’s talk about customers. In particular let’s talk about different types of customer segments. Good to see you’re excited about this. Some customers have smaller pocketbooks. We love these guys and there tend to be a lot of them. On the other hand we have customers with large pocketbooks and purchasing power. There are fewer of these but you’ll know who they are when you see them.
  • Understanding your customer’s capacity to buy will help you understand the market size. Understanding why customers choose a retailer will help you to drive sales. So what are the reasons customers buy or won’t buy? This is going to be different from industry to industry. You’ll see repeated themes like price, service, quality and some things that are industry specific.
  • If we look at this sample one, we could break down these high level categories into things they’re a little more nuanced. As an example, convenience can be broken down into things like ease of access and proximity, pick up and delivery, and in the store experience navigating your digital or physical properties.
  • With these importance dimensions defined we can then group your customers into segments that value each of these dimensions in a similar way. In this example we have four customer segments on the left. We can start to see the blue segment is over indexing on convenience and time while the red segment is indexing high for quality and less so for price.
  • Let’s do a quick recap. The first thing we covered segments have different purchasing powers. They have different preferences and there are lots of each of these segments in the marketplace.
  • Your success depends on the design and execution of your value proposition and its fit with your customer segments.