Skip links

Marketing segmentation, the key for customer retention

Acquiring new clients does not always mean increasing our client base, even less increasing profits. First of all, it is useless to get new clients if we are not able to retain the ones we already have.

Marketing efforts to attract new customers are around 5-7 times more expensive than engaging with those customers we already have. Not only that, most of the time lower investments lead to greater profits since the customers who we’ve previously acquired already know our business and are interested in our brand. 

Customer retention is a great opportunity to increase our profits that can’t be missed. This is where many companies try to figure out how to launch a loyalty plan to achieve this goal. The answer is simple: if we are working on retaining our customers, working on our database is essential, we will not find better information about our customers than what we’ve collected from our business relationship with them.

Good communication is essential to retain customers

Good communication has to be effective, and this means it has to be interesting for our customers. Each customer is different, and not everyone is interested in the same products, so communicating the same to everyone in a general way is not the most effective practice. 

Everyone likes to feel special, which is why personalization is so important. Receiving personal treatment is always much more satisfying and has more efficient results than receiving a general treatment. 

Food retailers have millions of customers, and it can become very difficult to communicate with each one individually, this is why retailers need to use segmentation as a business lever.

Segmentation allows us to group our clients based on certain common characteristics such as purchases, shopping behavior, category preferences, and others. All of these should be combined to make even more precise customer segments that lead to hyper-personalization of communications, loyalty programs, coupons, offers, and more. 

These are some of the most common types of segmentation:

  • Demographic segmentation: 

When we use variables such as age, gender, or education, we are talking about demographic segmentations. If, for example, we are offering products for customers over 18 years, we must use this type of segmentation to fine-tune our campaigns.

  • Geographic segmentation:

There are some products and services that don’t work as well in big cities as they do in small ones or some which work better in an urban setting than a rural one. For these types of products, demographic segmentation is essential.

  • Behavioral segmentation based on purchases:

Not all customers have the same purchasing preferences. Many consumers want specific brands, or only buy certain types of products. Segmenting these consumers allows us to provide them with a personalized offer of what they want, helping to increase their loyalty.

  • Psychographic segmentation:

This form of segmentation is focused on defining people’s lifestyles and classifying them according to their interests and motivations. These are not always reflected in the customer database which is why, if retailers want to create these types of segments, they must complement their database with qualitative studies, such as interviews, surveys, focus groups, etc.

Having our customer base well-segmented allows us to interact with them in a more direct and personal way. This will make our customers feel supported by our brand increasing their trust and loyalty, translating into greater customer retention.

Leave a comment