{"id":146086,"date":"2014-06-11T09:55:50","date_gmt":"2014-06-11T16:55:50","guid":{"rendered":"https:\/\/oroinc.com\/b2b-ecommerce\/blog\/five-keys-effective-customer-segmentation\/"},"modified":"2025-08-20T05:50:51","modified_gmt":"2025-08-20T12:50:51","slug":"five-keys-effective-customer-segmentation","status":"publish","type":"post","link":"https:\/\/oroinc.com\/b2b-ecommerce\/blog\/five-keys-effective-customer-segmentation\/","title":{"rendered":"5 Keys to Effective Customer Segmentation"},"content":{"rendered":"<p><a href=\"https:\/\/oroinc.com\/orocrm\/wp-content\/uploads\/sites\/8\/2018\/01\/Customer-Segmentation-800x600-1.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-medium wp-image-146087\" src=\"https:\/\/oroinc.com\/orocrm\/wp-content\/uploads\/sites\/8\/2018\/01\/Customer-Segmentation-800x600-1.jpg\" alt=\"Customer Segmentation\" width=\"800\" height=\"600\" \/><\/a><\/p>\n<p>We have more data about our customers than ever before. \u00a0Unfortunately, only 25% of companies believe they are effectively using the data they have to create better customer experiences.\u00a0 One way marketers can more effectively use their information is by creating customer segments. <span style=\"font-weight: 400\">Customer segmentation<\/span><span style=\"font-weight: 400\"> (also called <\/span><span style=\"font-weight: 400\">consumer segmentation<\/span><span style=\"font-weight: 400\">)<\/span><span style=\"font-weight: 400\"> is the practice of dividing customers into like groups for marketing purposes. \u00a0Customers can be segmented based on age, interest, attitudes, spending habits, location and so on. \u00a0In this post I want to highlight five keys to effective <\/span><span style=\"font-weight: 400\">customer segmentation<\/span><span style=\"font-weight: 400\">.<\/span><br \/>\n<!--more--><br \/>\n<strong>1. Make Consumer Segmentation Adaptive<\/strong><\/p>\n<p>Making segmentation adaptive means customer segments are constantly changing as customer behavior changes.\u00a0 For example, if you have a segment that represents people who have spent over $1,000 on your website over the last 365 days, this will likely change daily, with new people coming in and people leaving that don\u2019t fit the segment criteria anymore. \u00a0It is critical to have the tools in place to always keep segments fresh, as they should be a living thing, not a static list.<\/p>\n<p>&nbsp;<\/p>\n<p><strong>2. For Major Segments Create Personas<\/strong><\/p>\n<p>Creating buyer personas is a great way to better understand your customers and create a few broad segments within your organization.\u00a0 Personas are created as companies look at customer trends, market research, and talk in-depth to their customers.\u00a0 From there they are able to create a full persona explaining their background, demographics and highlighting motivations to purchase.\u00a0 When this information is identified and understood, it allows marketers to relevantly speak to this audience.\u00a0 We have found as some of our customers go through this exercise, they realize they have a few different personas buying the same or similar products with a very different set of motivations.<\/p>\n<p>&nbsp;<\/p>\n<p><strong>3. Consumer Segmentation Isn\u2019t Just for Marketing<\/strong><\/p>\n<p>As companies invest in creating personas, this information should be shared across the entire organization.\u00a0 Many companies use persona information to create new products and address customer needs and wants they hadn\u2019t seen before.\u00a0 This understanding of the customer can be shared across executive, product, customer service, and other teams within the company to holistically improve a customer\u2019s interaction.<\/p>\n<p>&nbsp;<\/p>\n<p><strong>4. RFM Analysis Allows for Effective Segments<\/strong><\/p>\n<p>RFM (Recency, Frequency, and Monetary) Analysis could and should be a blog post on it\u2019s own.\u00a0 This analysis allows companies to rank customers based on three distinct characteristics &#8211; how recently they purchased, how often they purchase, and how much they spend.\u00a0 This is a powerful tool as it allows marketers to watch macro and micro customer trends and easily create new segments.\u00a0 For example, customers who score high in each of the three categories could easily fit in a segment called \u201cTop Customers.\u201d\u00a0 Customers who score high in frequency and monetary, yet low in recency could be a customer segment called \u201cRescue Customers,\u201d and would then be the object of campaigns to bring them back to the store. \u00a0Understanding this information allows marketers to more simply understand customer behavior and create segments relevant to their business.<\/p>\n<p>&nbsp;<\/p>\n<p><strong>5. Predictive Segmentation is Needed<\/strong><\/p>\n<p><span style=\"font-weight: 400\">After companies conquer the basics of <\/span><span style=\"font-weight: 400\">customer segmentation<\/span><span style=\"font-weight: 400\"> it is highly valuable to move towards a predictive analytics model.<\/span> Predictive analytics uses technology to analyze large sets of data and find relevant patterns that predict how customers will react to certain interactions and offers.\u00a0 This allows marketers to move even closer to one-to-one customer interactions.\u00a0 While traditionally this technology has been reserved for large companies because of the investment required to effectively enable it, we at Oro are working hard to offer this capability to mid-market companies who need these technology-enabled marketing tools to compete in a new world of enhanced customer experience.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>We have more data about our customers than ever before. \u00a0Unfortunately, only 25% of companies believe they are effectively using the data they have to create better customer experiences.\u00a0 One way marketers can more effectively use their information is by creating customer segments. Customer segmentation (also called consumer segmentation) is the practice of dividing customers [&hellip;]<\/p>\n","protected":false},"author":44013,"featured_media":0,"comment_status":"open","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"ep_exclude_from_search":false,"footnotes":""},"categories":[208],"tags":[133],"class_list":{"0":"post-146086","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-sales-marketing","7":"tag-orocrm"},"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.8 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>5 Keys to Effective Customer Segmentation | OroCommerce<\/title>\n<meta name=\"description\" content=\"Customer segmentation is one of the most powerful ways you can make use of your data. 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