Segmenting usersBack to Glossary
Segmenting users is the process of separating customers into similar groups usually based on geographical, psycho graphical, behavioral and demographic variables, such as location, age, sex, interests, socio economic status and spending habits.
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This process is used by companies to better target specific customer groups and perfect their marketing efforts.
The marketers direct different marketing techniques and strategies towards their different defined customer groups. The type of groups to define is an important decision a company can make, since these customer groups will be the basis of their product market testing. Grouping customers by the color of their hair is probably not a good group to filter by. But grouping by demographic location or age is a better choice because it would allow better results during market testing.
Types of segmenting users
Two common types of segmenting are traditional segmenting and value-based segmenting.
- Traditional based segmenting identifies groups of customers based mainly on their demographics such as their psychological profiles.
- Value based segmenting groups customers together based on the costs to maintain relationships with them.
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