Customer segmentation becomes an excellent approach for engaging diverse customer segments promptly and with precise information when effectively executed. Efficient implementation enables a deeper understanding of your customers, catering to their specific requirements and enabling business growth.
What is Customer Segmentation?
In simple terms, consider customer segmentation as dividing your customers into smaller groups based on specific characteristics.
These could be things like their preferences, buying habits, demographics, or any other criteria that might help you understand them better.
The goal here? To give your marketing, sales, and product design teams a deeper understanding of who they serve. That means they can tailor their efforts and directly address each group’s unique needs and wants, making your business more effective.
We are talking about delivering the right product to the right person at the right time – could it get any better than that?
So whether you are a small business owner or running a large enterprise, understanding your ‘who‘ could be just the push your business needs to level up.
Also, segmentation isn’t just an excellent strategy but a powerful tool for business growth. Your customers will love it because it means they get a personalized experience.
Why Is Customer Segmentation Important?
Customer segmentation is important for several reasons:
Targeted Marketing
By dividing customers into different segments based on their characteristics, behaviors, or preferences, businesses can tailor their marketing messages and strategies to each segment’s specific needs.
This allows for more personalized and targeted marketing campaigns, leading to higher engagement and conversion rates.
Improved Customer Experience
Segmenting customers enables businesses to understand their diverse customer base better. Companies can create customized experiences, products, or services that meet customers’ expectations and preferences.
They do this by identifying common patterns and traits within each segment. This leads to higher customer satisfaction and loyalty.
Resource Allocation
Not all customers have the same value or potential for a business. By segmenting customers, companies can identify their most valuable segments, which helps in allocating resources effectively.
This way, companies can focus their efforts, time, and budget on the segments most likely to generate higher returns.
Market Differentiation
Customer segmentation allows businesses to identify niche markets or untapped opportunities. Companies can differentiate themselves from competitors by targeting specific segments with unique needs or preferences.
And develop specialized products or services catering to them. This can lead to a competitive advantage and increased market share.
Generally, customer segmentation is vital for businesses to understand their customers better, deliver personalized experiences, optimize marketing efforts, and stay ahead in a highly competitive marketplace.
What Are the Types of Customer Segmentation?
Dynamic Segments
These are segments that update automatically based on the rules and conditions you define. For example, you can create a dynamic segment of contacts who live in a certain city, have a specific job title, or have opened your last email. Dynamic segments are useful for keeping your audience up to date with the latest data.
Static Segments
These are segments that you populate manually by adding contacts one by one. For example, you can create a static segment of contacts who attended your webinar, filled out a survey, or gave you a referral. Static segments are useful for creating one-time or ad-hoc groups of contacts.
Similar Segments
These are segments that use artificial intelligence to find contacts who are similar to a selected contact or a seed segment.
For example, you can create a similar segment of contacts who have the same preferences, interests, or behaviors as your best customers. Similar segments are useful for finding new prospects or expanding your reach.
Suggested Segments
These are segments that use artificial intelligence to suggest groups of contacts based on measures or attributes you choose.
For example, you can create a suggested segment of contacts who have a high customer lifetime value, a low churn risk, or a high engagement score. Suggested segments are useful for discovering insights or opportunities in your data.
To create a segment, you need to go to the Segments page in Dynamics 365 for Marketing and select New. Depending on the type of segment you want to create, you can either use the segment builder to define your own rules and conditions.
Alternatively, you can use the segment templates to get started with some predefined criteria. You can also edit, duplicate, refresh, activate, deactivate, or delete your segments from the Segments page.
Steps on How to Segment Customers in Dynamics 365
1. Go to Outbound marketing > Customers > Segments
2. Click on New to create a new segment and select New Dynamic Segment
4. Name the segment and optionally write a description for it
5. Define the rules and conditions for the segment by selecting the appropriate fields and operators and Save
Final Thoughts
With these steps, you can create effective customer segmentation in Dynamics for Marketing. Creating contact segmentation is a breeze if you’re using Microsoft Dynamics for marketing.
Remember, segmentation lets you target the right audience with the right message, improving engagement and conversion rates.
Use the power of Dynamics for Marketing to make your campaigns better by dividing your customers into groups based on their characteristics.
