customer segmentation Brands Marketing Strategy

How to Use Customer Segmentation for Sales Growth


When done right, a mindset-based segmentation approach can be like finding buried gold. As opposed to a top-down demographic segmentation, which provides some surface-level information, a bottom-up mindset segmentation approach reveals the deeper psychological factors that influence a customer’s decision-making process. When you reach that X on the map, wouldn’t you rather be carrying a shovel than a rake?


Mindset-based customer segmentations recognize that customers within the same demographic category may have diverse needs, preferences, and attitudes. At the core of mindset segmentations lies the ability to unearth rich profiles by digging deeper than a surface-level analysis of consumers. Within these customer segments is a treasure trove of information about their values, personality traits, interests, aspirations, and lifestyle preferences.


However, unlike an actual treasure hunt, the job isn’t done after you’ve collected the chest filled with loot. The real challenge lies in utilizing the segmentation information efficiently and effectively to boost your sales growth. It's not enough simply to know why your customers do what they do; you need to leverage that knowledge to drive tangible results.


Customer segmentations have the power to transform brands from mere products or services into entities that truly understand and cater to the desires and aspirations of their target audience rather than parroting a one-size-fits-all approach. They provide a foundation for establishing meaningful connections with customers, enhancing brand relevance, and fostering long-term success.


This post will illustrate how to get the most out of your customer segmentation plunder and use the method as a catalyst for sales growth. We will explore how understanding consumer attitudes can inform your marketing strategies, refine your targeting efforts, and optimize the customer journey. By embracing the power of customer segmentation, you will open the door to new opportunities for relevance, resonance, and long-term success as you navigate the open seas of today's dynamic marketplace.


How can customer segmentation help your marketing strategy?


Shifting metaphors: Being the conductor of an effective market strategy orchestra requires a deep understanding of your customers, and customer segmentation provides a powerful framework for helping you hit all the right notes. This invaluable knowledge becomes the secret sauce for creating targeted marketing strategies that strike a chord with specific segments, optimize resource allocation, and maximize your return on investment. Here are four ways a customer segmentation can help your marketing strategy stay in tune:


Capture core values

Capturing the core values of your customers provides a peek behind the curtain into their attitudes toward both your product and life in general. You’d be forgiven for not assuming that agreeing with the statement “I tend to see the world in black and white rather than shades of gray” would be a defining feature of a mindset that is enthusiastic about purchasing running shoes. That this is true demonstrates how segmentations go beyond surface-level demographics and dive into the underlying beliefs and values that drive a customer’s decision-making process. By understanding the core values of your target market, you can orient your brand toward creating a stronger emotional connection with specific segments. 


Understand behaviors

In addition to core values, customer segmentation allows you to analyze purchasing behaviors alongside attitudes. By examining the purchasing patterns of different segments, your company can score front row seats to the consumer preferences, motivations, and trends that influence their decision-making process. 


Importantly, you can incorporate behavioral insights in concert with underlying values and attitudes. In other words, behavioral measures can be included and considered alongside attitudes in rounding out your understanding of each segment, e.g., “I structure my days around running.”


Identify emotional and aspirational drivers

Another way segmentation goes beyond surface-level analysis is by delving into the deeper realm of emotions, desires, and aspirations that compose consumers’ choices. By understanding these emotional drivers, you gain valuable insights into the psychological factors that drive customer behavior. Whether it's a sense of belonging, the desire for self-improvement, the need for security, or the pursuit of adventure, emotional drivers vary among different customer segments. Customer segmentation enables you to identify these unique emotional triggers and develop marketing strategies that tap into them effectively. 


Improve targeting

One of the significant advantages of customer segmentation is the ability to identify the relative size and characteristics of each segment. By gaining insights into the demographics, psychographics, and behavioral traits of your customers, you can target them more efficiently (even if they’re sitting in the back row). This focused approach ensures that your marketing efforts are directed toward the most receptive audience, optimizing your resources and maximizing your return on investment. With improved targeting, you can tailor your messages, channels, and promotional activities to match the specific needs and preferences of each segment, resulting in higher conversion rates and customer satisfaction.


Putting customer segmentations into practice


Now that we’ve covered the foundational benefits of customer segmentation, let's explore some practical ways your company can implement it effectively. 


A better blueprint for the customer journey

Track your brand funnel—the journey from awareness to consideration to purchase—for each segment. By examining the customer journey specific to each segment, your company can identify areas of improvement and tailor your marketing efforts accordingly. This approach ensures a more personalized and seamless experience for your customers, enhancing their satisfaction and increasing the likelihood of conversion at each stage of the journey. 


Tailored messaging

You wouldn’t want to wear a one-size-fits-all dress or tux to your own wedding, right? Similarly, your target market is unlikely to respond uniformly to your marketing appeals and it would be a mistake to get hitched to your messaging without the proper tailoring. By understanding the characteristics of each segment, you can customize your messaging to appeal to their specific needs and preferences. Using either a split-sample or conjoint-style approach, analyze which elements of your messages resonate the most with key segments and adjust your communication accordingly. 


For example, you may find that a particular call to action is effective in increasing purchase intent among previously ambivalent segments while being less effective to a segment that is unlikely to develop enduring loyalty to the brand. By testing messages against your unique audience segments in mind, you can make informed decisions that maximize appeal, minimize risk, and identify the avenues that could best serve your audience based on their mindset and needs.


Continuous monitoring and iteration

To stay on top of the customer landscape, adopt a tracking-style exercise to monitor how the size of your target segments evolve over time. It’s important to continuously monitor key metrics, such as customer satisfaction, brand perception, and purchase behavior, within each segment to know when your brand may be falling out of favor. This ongoing analysis allows you to identify shifts in attitudes, behaviors, or market trends, enabling you to adapt your marketing strategy.


With customer segmentation as your guide, you can unlock the power of targeted marketing, strengthen customer relationships, and drive sales growth. Unsure how to conduct a customer segmentation? Gradient would love to help

Cory Manento

Written by Cory Manento

Cory holds a master’s degree and PhD in Political Science from Brown University, specializing in experimental survey research on voter attitudes, behavior, and electoral preferences. Coming from a background in which success is achieved through rigorous causal inference and sharp research design, Cory thrives on translating client needs into testable questions that yield actionable results.

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