New Venture Lab: Equipping Christian Entrepreneurs

Question

How do I define my customer segments?

Answer

Analyze your customer along several dimensions such as geography, size of customer, type of customer, size of the customer relationship, type of customer relationship, profitability of customer, demographics of customer (such as age, income, marital status and presence of children for consumer customers), and psychographics of customer (such how the product makes them feel, what they are trying to achieve by using the service, etc.) and look for natural breaks in the data.  You can then create and name segments so you can easily identify different types of customers and at a glance have a sense for them and their needs based upon your segmentation work.  Wal-Mart for example segments their customers into three main segments: "value-price shoppers" (customers who like low prices and cannot afford much more), "brand aspirationals" (people with low incomes who are obsessed with brand name goods), and "price-sensitive affluents" (wealthier shoppers who love deals).