WHY COMPANIES NEED TO CATEGORIZE THEIR CUSTOMERS?

Segmentation of customers or markets to position the product on offer is a very commonly used marketing technique, which has evolved with latest advancements of more precise methods of carrying out needed segmentations. Categorizing a sample set of customers among the segmentations you are looking at in positioning your product is greatly important, since it helps to speak the words of product success or failure.

However, do you feel this process of customer categorization to be a cumbersome one? Well, they say you need to do the extreme to get the best results, certainly identifying the relevant customer segments and collecting the relevant data is time consuming. However, applying the concepts of customer segmentations could highlight future issues while bringing potential solutions.

The foremost advantage of proper customer segmentation is the ability to differentiate your products from that of its competitors. And in return such a solid strategy of customer segmentation will help in delivering a unique product at a price above that of competitors. Hence segmentation of customers is all up to you and the business goals you have drafted. However here is a list of common customer segmentation approaches that might be of use to you, the next time you decide to categorize your target customer base and why it’s important.

• Demographic segmentation of customers includes segregations by gender, age, marital status etc. Such a method of segmentation helps your company to target the relevant product to the most appropriate demographic characteristic, while being focused aiding product awareness and a growth in sales.

• Geographic segmentation includes segregation of customers according to their locations. This helps you to position your products in locations according to the demand, making you avoid excess supply in the location spoken.

• Behavioral segmentation, will take you into segregation of the customers by buying behaviors. This will be a very important type of segmentation if you are in a state of confusion if you are to sell your products online or in a store.