Benefits of Customer Segmentation for your business in 2020

You must have heard a proverb – ‘Every shoe fits None’.

Well, here it fits exactly the same. Customer Segmentation is a better choice to know your customers better and personalize your campaigns for each individual customer. And in the criteria which best suit them. It is not that bifurcating your customers into good and bad but in the different criteria. And segments via which you can pitch your message better.

And in the wholesome goodness of this segmentation, you tend to know the benefits of customer segmentation also.

According to a recent survey, 70% account for segmentation. This is foreseen while making plans for a business strategy.

Benefits of Customer Segmentation

1. More customer retention

A personalized connection with your customers will help you to win satisfied customers.

About 75% of satisfied customers are more likely to remain with that organization who regularly meet up their needs.

2. Enhances Competitiveness

More customer retention. More will be revenue generation. And all of this will enhance your competitiveness in the market. If you segment up your market, you are well known to your customers & accordingly. You will work to give them the expected result.

3. Establishes Brand Identity

By segmenting your customers, you can make them well aware of your brand. Identifying your brand will help your customers to directly engage with your products. This will increase your goodwill in the market & a brand value will be established among your other competitors.

4. Better Customer Relationship

Better customer segmentation will lead to developing a better relationship with your prospective customers.

This will leave for developing a better relationship for your client base.

Communicate with your customers on their queries & requests. Regular communication will make you update about the new upcoming changes & opportunities to be availed of.

5. Leads to Price Optimization

Try to understand the social and financial status of your customers. This data will assist you to pace up with the price optimization accordingly.

6. Best economies of scale

Customer segmentation helps in better allocation of resources which in return helps you to gain economies of scale.

Economies of scale mean when you are able to achieve your desired goal and that too at most efficient cost.

This can be done through customer segmentation. Therefore, try to focus on a limited number of resources which will help to serve with resources.

7. Improves Channel of Distribution

Customer segmentation will improve your channel of distribution. By knowing the right number of customers you can direct the right channel of distribution. This will remove confusion among your team members about whom they have to deliver the product & at what time.

You will be able to choose a precise channel of distribution & that too at minimal cost which eventually serves the best needs of your customers.

8. Personalization

HubSpot analyzed over 330,000 calls-to-action and their performance over a 12-month period. They found that personalized calls-to-action performed 202% better compared to generic calls-to-action. Providing a great customer experience is the need of the hour for every business today. In fact, 80% of people perceive customer experience to be as important as a brand’s services or products. And eCommerce personalization can go a long way to ensure that you provide exceptional customer experience.


The standards of good customer experience are ever-increasing. In fact, 67% of customers don’t mind paying a premium if businesses can provide them with an amazing experience. Segmentation helps to grow your business by building long-term relationships with your customers and providing exceptional customer experiences. And above all, it helps you stay innovative or at least helps you to stay at par with your customer needs.

Having discussed all of the benefits of customer segmentation, it’s important to emphasize that good data and analytics are the basis of segmentation. Data should be clean, updated regularly, and error-free. If the data is not correct or misinterpreted, then all segmentation efforts will be meaningless.

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