The Importance of Customer Segmentation in your Business
Every business will, or certainly should, have a good idea what their average customer looks like. Having an understanding of factors like where they work, their age, their income and the language they speak is hugely important when it comes to marketing to those customers. After all, if you don’t know who your customers are, you’ll have no idea where they’re likely to hang out and how you can reach them effectively.
Wonga South Africa, the short-term loan provider, recently carried out some research to find out a little bit more about its customers and created this infographic based on its findings.
The research found that:
- The average age of a Wonga customer is 34;
- Their average monthly income is R 21,139;
- 41 percent of their customers listed English as their first language compared with 18 percent who said it was Afrikaans;
- Wonga customers are usually single and do not have children;
- 70 percent were active on social media;
- Existing customers borrowed an average of R3024 over 24 days, compared with R1545 over 22 days for new customers.
But why is this information so valuable?
Learning more about your customer base allows you to create an accurate profile of a typical customer. The more you know about them, the easier it is to sell to them and increase their spending. You can also use the data you collect to help you find new customers.
Once you have generated an accurate picture of what your typical customer looks like, it then makes it possible to target those individuals more effectively with offers, products and services that are tailored to meet their particular needs. For example, if you know that a large proportion of your customers use the social media site Facebook, sending offers and other marketing communications to them through this medium could increase their uptake.
Why is customer segmentation so important?
Customer segmentation has a key part to play in helping South African businesses get more bang for their buck when it comes to their marketing spend. Splitting a customer base into groups that share similar characteristics and traits allows businesses to reach new and existing customers with a targeted message at the right time and in the most appropriate way. Businesses can even go one step further and actually tailor their products and services to meet the particular demands of different customer groups.
We all know that a one-size-fits-all approach rarely works in marketing. A lot of businesses make the mistake of kick starting their marketing campaign before they’ve given proper consideration to who their customers actually are. The truth is that if you don’t know who you’re talking to, how can you possibly hope to communicate with them in the right way? When it comes to targeted marketing, the devil is in the detail. And customer segmentation plays a crucial part in delivering the level of detail you need.
Do you use customer segmentation when marketing to your customers? What success have you had? Please share your experiences in the comments below.