Use of Data Science in Customer Segmentation and Targeting
By TOI Team March 16, 2022 Update on : March 16, 2022
The main objective behind this is to perform a segmentation analysis and assess the target segment members through the Data Science methods in sales and marketing. Using the Data Science technique, one can comprehend the data-driven approach of the Business model. You must be wondering how the Data Science method will understand the given approach. Simply by sorting the customers into different segments and then spotting the members of the target sort.
For the survey of the customers, two theoretical marketing backgrounds are used, and they are segmentation and targeting. Generally, businesses tend to attract new customers at high prices instead of leveraging their existing customer base. Don’t these things sound interesting to know more about? So, let’s see all about customer segmentation and targeting through transaction patterns, holdings, and past trends.
What Is Customer Segmentation And Targeting
Customer segmentation is the model that uses the Data Science method to create several groups of customers having similar features or attributes in all of them. For instance, a company segments its customers into various groups based on age, loyalty, gender, location, product holdings, and possible services. Before the availability of Data Science, marketers and communicators found it hard to spread their approach wide and loud enough to reach many people. But today, it has increased exponentially and made sorting of customers far easier than expected, and you learn more about it from data science courses. Taking up the best Data Science course online can help you understand how to segregate customers and target them category-wise to get the best impact.
Companies accomplish many important things through customer segmentation, like targeting the market directly on a marketing program. Through this, they can attract specific customers to buy their products. This is also known as reactivating lapsed customers in business terms. This sorting and targeting of more and more customers are today possible only due to the use of Data Science.
Why Customer Segmentation And Targeting Is Important
Till now, you must have got an idea of what customer segmentation and targeting theory is. Now let’s know why it is crucial. Customer segmentation is essential because it provides the company or business with a substantial amount of data that they can use to focus on business strategies. This can help the companies to boost their product growth by determining the particular group of people who may not wish to buy the product at a certain price range. This way, business people will understand the market trends and allow their product to reach the right customers.
Moreover, once the company gets to know its customer base through customer segmentation, it becomes easy to target different areas of interest with different products. This critical thesis helps the companies introduce new products that may meet the customers’ requirements and prove to be the best selling commodity, enhancing the chances to gain profit. Customer segmentation is also a crucial fraction of the lead scoring process.
Main Types Of Customer Segmentation
Customer segmentation has various techniques, including demographic segmentation to firmographic segmentation. Also, it involves multiple Machine-learning and product-based segmentation. These segmentations aim to be grouped depending on the essence of business data and can easily be implemented in their work strategies.
This is the simplest kind of segmentation in which the companies usually obtain the demographic information of customers, like their age, education, gender, income, marital status, and occupation. The theory of demographic segmentation says that there is a difference in their needs and shopping habits with their demographic status.
Various companies pay the experts to segment their customer base using demographic networks like the Mosaic model. If you want to perform the demographic analysis, Google Analytics will provide you with the primary variables, which will be sufficient to categorise your customer group.
Firmographic segmentation is how B2B customers are segregated at each company level. In the environment of B2B e-commerce, the company name, the customer’s job title, company’s turnover, sector, total employees, and sites are used as the variables of firmographic segmentation. But not all customers give relevant data, making it difficult to segment.
Moreover, a standard industry classification (SIC) code system segments various companies. This assigns every company a distinct business reference and helps you target those companies.
This segmentation method creates the standard for the products that the customers already purchase. This type of segmentation is mainly done in retail stores, and it has a wide range of options to target and develop the product accordingly.
For instance, the customers purchase some products daily, while others are only purchased once. So, product-based segmentation helps the companies or retail store managers to analyse which product is more demanded by the customers.
Targeting Right Audience
Companies need to follow certain tips to target the right customers to market the product or share using Data Science. They are:
1. Know Your Valuable Customer
The company needs to conduct a survey and collect customers’ data at different stores. Then, analyse the collected data to predict the lifetime value of their customers. The analysis based on Purchase likelihood and customer lifetime values are the best indicators to know the value of customers.
2. Determine Next Step To Engage Customers
The right audience will be targeted when your marketing strategies attract more customers. Here, data-driven recommendations can prove to be very useful to do so. For this, you can update new features, optimise the email performance and advertise at the right time to suggest to the customers about your next actions.
3. Improve Your Campaign
When you have data to identify the customer’s attraction towards a particular product, you must increase your marketing plan to reach your targeted audience. So, every time you decide on your next campaign, make it better using relevant data. You shouldn’t to miss Breakthrough of 10 Scientific Innovations.
Every year, organisations collect a vast volume of informative data from raw data, and ultimately it supports them to make better decisions and reach out to their targeted audience in a better way. If you want any courses on Data Science, you can get an online MTech in Data Science course at Great Learning.