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What is Customer Segmentation?


Definition and Meaning

While you might not be familiar with the term, there’s a good chance that you’re already practicing some of the major concepts of the marketing technique. Simply, customer segmentation is the practice of dividing a customer base into different groupings, whether it be gender, age, interests, or even spending habits. Customer segmentation primarily applies to your business’s marketing efforts. By separating your base into small groupings, you can better adapt your advertisements to appeal to these smaller segments.

Why Should I Practice Customer Segmentation?

Now that you’ve received an answer to the question of “what is customer segmentation,” you may be wondering why it’s important for you to practice this common marketing strategy. For starters, broad advertisements attempt to target a giant grouping of people, and there’s no guarantee that those efforts will appeal to those who come across the ad.

By practicing customer segmentation, you can create specific, unique marketing strategies that directly appeal to these smaller groups. Of course, you’ll have to understand what these specific customers are looking for in a product or service (for instance, a teenage girl probably won’t be shopping for the same things as adult men). When you understand how these specifics segments operate (and, vicariously, shop), you can better adjust your marketing efforts for maximum financial success.

How Do I Prepare for Customer Segmentation?

If you’re going to be capitalizing on customer segmentation, there’s several factors you’ll want to keep in mind as you’re preparing your efforts. The majority of these tasks revolve around your collection and analyzation of the results. There’s nothing to worry about, as this process should be relatively easy. Eventually, you’ll be happy that you sought an answer to “what is customer segmentation.” Preparation includes:

  • Deciding what data you’ll analyze
  • Collecting the data
  • Analyzing the data
  • Sharing the data with the relevant business units
  • Implementing the data into your marketing effort

How Should I Separate My Groups?

After you received an answer to “what is customer segmentation,” we’re sure your next question went straight to a dividing strategy. In other words, how do you end up segmenting these groupings for maximum success? There are several groupings that businesses tend to focus on:

  • Demographics
  • Includes age, race, ethnicity, religion, sex, income
  • Geography
  • Includes where the customer lives/works/plays
  • Psychographic
  • Includes social class and lifestyle (as well as the accompanying characteristics)
  • Behavioral
  • Includes spending habits, consumptions, buying tendencies

Should I Use Customer Segmentation in My Shop?

Of course! Regardless of the size of your business, it’s always important to segment your customer base. This is especially useful if your Spreadshop side-hustle is relatively small. You’ll presumably want to keep your marketing costs relatively low. Thanks to the data you’ll gather from customer segmentation, you can subsequently invest this money into specific groupings.

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