Customer segments are the groups of people a business aims to serve.
Serving them effectively is key to building a successful business.
Common customer segments
A Mass market segment has customers that can all be treated the same because they all have similar needs.
A Niche market segment is a specific subset of the market that is targeted using marketing and products/services that are heavily tailored to them.
A Segmented market segment has several types of customers that use the same or similar product/service in different ways.
Diversified market segments are separate market segments with different marketing and products/services. Companies typically move into diversified market segments after scaling their first market segment.
- This typically occurs when a company is branching out into a new market after the first business scales.
Multisided market segments are market segments where the user segments are dependent upon each other to receive value.
- For example, Facebook has users and ad marketers which dependend on each other. Ad marketers need users to see their ads, and users need ads to pay for the experience so they can browse for free.
How members of a customer segment are differentiated
Customer segmentation is often done using attributes. There are four categories of customer attributes that are used for segmentation.
To differentiate customers between segments, consider these three factors: :–:
Homogeneity: The customer attributes that are similarities among customers in the segment.
Distinction: The customer attributes that are differentiators between customers in this and other segments.
Reaction: Customers within a segment x1respond to the same marketing and offers.
Determining customer segments for a product
- Who uses the product?
- What do they use the product for?
- When using the product, what are their pain points? What problems need to be solved?
- How do they solve those problems now?
- What is their Decision-making process?
- Who influencess them?
Define the Customer archetypes and Customer acquisition strategy for each archetype.