Glossary · Customer Satisfaction
- Customer Segmentation
- Grouping customers by shared characteristics so you can serve each group on its own terms.
Customer Segmentation in Practice
Common Segmentation Approaches
| Approach | What it groups on |
|---|---|
| Demographic | Age, role, location |
| Firmographic | Industry, company size, revenue |
| Behavioural | Usage patterns, purchase history |
| Needs-based | Underlying job-to-be-done |
| Value-based | Revenue, CLV, profitability |
In practice, the most effective segmentation combines a behavioural dimension with a value dimension. Behaviour tells you how to serve them; value tells you how much to invest.
Furthermore, segment sparingly. Ten small segments are harder to act on than three clearly differentiated ones.
Frequently Asked Questions
For most B2B businesses: firmographics (size, industry) and usage behaviour. For consumer businesses: behavioural signals (RFM - recency, frequency, monetary) and life-stage. Demographic-only segmentation is rarely actionable on its own.
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