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If you are anything like the rest of the world, then you know what it’s like to be confronted with terminology for a specific field or industry and have absolutely no clue what is being said. On the whole, this doesn’t seem so bad, but if you’re in business, you can’t simply walk away from industry jargon, especially when it is as important as customer segmentation.

Even so, it is possible that even though you’re being an invested business owner and doing all that you can to make your business successful, you can be clueless. Everyone tells you that customer segmentation is where it’s at, so you buy books, go to conferences, and still nothing. Does this sound like you? Do you sometimes find yourself sneaking into your advertising and marketing department’s meetings in the hopes of getting some more insight?

As difficult as it may be to hear, customer segmentation isn’t really too tough to understand. The problem lies with all of the jargon that gets tacked onto it that makes it hard to figure out. In a nutshell, customer segmentation is exactly what it says. Your business takes a long, hard look at the prospective customer base at large, and you try your best to understand such a large group. As such, you start dividing the group up into smaller groups based on similar characteristics, thereby creating segments.

From these segments, you start getting a bit more detailed about your break downs, going so far as to creating customer profiles. Essentially, you’re working in terms of subdivisions. Trying to appeal to the original massive customer base would mean you’d be operating in vague terms so as to try to make everyone happy. We all know that making everyone happy is impossible, so you try to find the best way to appeal to the group of individuals more likely to become actual customers.

For some business folk, the idea of trying to decide which segment of the prospective customer base is best to focus on seems out of place. Aren’t you trying to make everyone your customer? Sure, but that isn’t a realistic goal. Your product or service will not appeal to everyone, and using resources to try and force it makes no sense.

By finding the right segment to focus on, businesses can now more effectively create strategic plans for their marketing and advertising, thereby targeting prospective customers with materials that feel almost customized and created just for them. It’s no accident when you read a magazine or watch a commercial and find that it’s almost as though the manufacturer of a certain product or service could read your mind. That is customer segmentation doing its thing.

Finally, it is important to keep in mind that customer segmentation isn’t just about selling a product now for quick profit. The process by which you were able to define customer segments also provides invaluable data to businesses. Considering this data includes information on general demographics and income, for example, businesses can effectively have their finger on the pulse of their customer base for years to come.


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