Categorizing customers by interactions can inform actions, benefit performance, and increase outcomes throughout an organization.

What is market segmentation

Market segmentation is the grouping of an audience by shared factors. In retail, businesses can use data science to classify customers based on touch points, such as:

  • Purchasing Behavior — How customers interact with the organization
  • Occasion and Timing — When consumers engage with the organization
  • Benefits Pursued — What unique advantage(s) a product provides to consumers based on interactive data and customer feedback
  • Customer Loyalty — How customer use rewards programs and engage with marketing campaigns and the organization 

Why the C-Suite should care

Using market segmentation, organizations can make more intelligent business decisions. An example is a retail organization that identifies its customers who shopped the last two Black Fridays. Then, the company targets that segment to mail high-cost holiday catalogs.

Organizations take advantage of audience commonalities to tailor customer experiences, enhance brand loyalty, and boost profitability. Recently, Gartner reported that 87% of customers strongly committed to a brand were more likely to pay a premium.

By pursuing moves advised by market segmentation, organizations can achieve significant business outcomes across the ecosystem:

  • Product Development — Informs the design of products to cater to customer groups
  • Distribution — Assists analysts in categorizing products based on customer segmentation
  • Product Placement — Helps determine where within stores to place products and assists with designing targeted campaigns and better visuals for locations
  • Marketing — Advises outreach strategies to enhance customer engagement experiences

Getting started with market segmentation

To help demonstrate what is possible with market segmentation, the data scientists at eCapital Advisors specially designed an application within the Incorta MarketPlace. Incorta customers can access the code and visuals by eCapital to quick-start customer-level segmentation.

eCapital Advisors offers data science consulting, personalized demonstrations, and custom-engineered solutions for the machine learning needs of businesses across industries. Contact eCapital Advisors to begin a data science project and elevate organizational performance.