21 real-world examples of customer segmentation
In today’s hyper-competitive world, personalized ads are necessary if you want to stand out, get your brand noticed, and boost revenue. To help their company reach its goals, business owners and executives need to understand which customers to target with personalized ads — but it can be challenging to know exactly who those customers are and how to target them.
The key is to segment your customers into groups with common characteristics, a process known as customer segmentation. If you’re unsure what customer segmentation is or how it fits into your marketing strategy, you’re not alone. Even if you have an experienced marketing team looking to expand its list of customer segments, seeing some real-world examples of customer segmentation can help you revitalize your own strategy with new inspiration.
Customer segments are vital in order to properly target personalized marketing. In this guide, we’ll explore 21 leading customer segmentation examples that will help you connect with your ideal audience and improve your marketing efforts.
Specifically, we’ll cover:
- What is customer segmentation?
- Benefits of customer segmentation
- Customer segmentation models
- Customer segmentation examples
- How to manage your customer segments with the right software
What is customer segmentation?
Customer segmentation is the process of grouping your target audience into smaller segments based on shared characteristics. As part of this process, marketers use specific factors to create each sub-group, which are known as customer personas. A customer persona is a fictitious character that describes the interests, traits, and behaviors of a particular customer or customer segment.
Some of the variables that marketers may analyze to segment audiences include geographical data, psychographic traits, demographics, or history with the brand (i.e., new customers versus repeat customers).
One popular approach to customer segmentation is psychographic segmentation. Psychographic segments are based on preferences and interests instead of factors like age or gender. However, most marketers will use both psychographic segmentation and traditional customer segmentation strategies when creating customer personas.
Customer segmentation vs. market segmentation
Customer segmentation should not be confused with market segmentation. The latter refers to the process of breaking down a market into distinct segments. While market segmentation uses some of the same categories to group audiences, it aims to identify which groups exist in a specific region to assess market viability. It is not used to create buyer personas or target high-value customer groups.
Benefits of customer segmentation
Using customer segmentation to create buyer personas can give marketers actionable insights into each group’s buying habits, preferences, and interests. In turn, they can use this information to develop tailored marketing content that resonates with a specific group. Ultimately, this will allow marketers to maximize the return on investment of advertising investments, generate more leads, and drive conversions.
In addition to gaining customer insights, other benefits of customer segmentation include:
- Communicating on preferred marketing channels
- Boosting customer engagement
- Improving customer loyalty
Customer segmentation models
There are four main models for customer segmentation.
Demographic customer segmentation. Demographic customer segmentation involves grouping audiences by factors such as marital status, education, income, gender, and age. This is one of the most practical segmentation types, as variations in these factors are strong indicators of buying habits.
Behavioral customer segmentation. Behavioral customer segmentation considers behaviors like product usage, tendencies, shopping preferences (i.e., in-person or online shopping), and more.
Geographic customer segmentation. Geographic customer segmentation divides audiences based on which country, state, city, or town they reside in. This segmentation practice is useful when targeting new markets or engaging in local SEO.
Psychographic customer segmentation. Psychographic customer segmentation looks beyond basic factors like age or gender and instead shifts its focus to personality, attitude, interests, and values. Psychographic segmentation takes a deep dive into psychological attributes that drive users’ spending habits.
Generally, marketers will use several different segmentation models to create target audiences. For instance, you may decide to target some customers based on demographic variables like their ages but also run a campaign geared toward consumers with specific buying habits.
Customer segmentation examples
The 21 customer segmentation examples that made our list are some of the most commonly used variables to divide and target audiences.
Generally speaking, male and female customers exhibit different shopping habits. It’s no wonder so many brands create separate marketing campaigns geared at each gender. This approach allows businesses to tailor everything from imagery to the verbiage of their call to action (CTA) to align with each group’s buying habits. Launching gender-specific campaigns is more effective than attempting to run one unified campaign that doesn’t account for each group’s unique traits.
To see an example of gender segmentation, just check out any clothing industry that sells both men’s and women’s clothing. These brands often have entirely separate web pages for each group. Naturally, each page or set of pages will feature a model of the appropriate gender to help catch the viewer’s attention. Gender segmentation is a prime example of demographic segmentation.
Age is another common example of demographic segmentation. On its own, age will tell marketers a lot about an individual’s interests and buying habits. However, combining it with one or two other variables, like gender and location, reveals even more insights. For example, a 20-year-old male living in New York City will have different interests than a 65-year-old female residing in Miami.
Once again, we can look to the clothing and apparel sector for an example of age-based segmentation. Check out any website that sells adult and youth clothing. The youth section will be geared toward viewers of that age group and their parents. Conversely, the adult section will include an adult model, probably one that is in the same age range as the youth segment’s parents.
Segmenting customers by occupation serves multiple purposes. First, it can provide insights into their interests and shopping habits. Additionally, gathering professional data allows you to make inferences about their incomes, even if they decline to share that data with your company.
Occupation is a demographic customer segmentation example. This variable is most useful when combined with additional information. For instance, a mid-20s blue-collar worker in the Pennsylvania steel industry may be likely to support some of the state’s major sports teams, such as the Pittsburgh Steelers. When targeting this segment, you could run ads on team websites or during broadcasts of the games.
4. Marital status
Marital status is another practical customer segmentation example. Brands can target customers based on whether they are single, married, engaged, involved in a serious relationship, or divorced. An individual’s family situation will directly impact their spending habits and total disposable income. Segmenting customers in this way will help brands get their content in front of the right audiences.
For instance, a video game developer can use this demographic segmentation model to target families with ads about its newly released game. In the ad, the developers could show an ecstatic child opening a package containing the game while their parents happily observe. Such an ad would generate intrigue among children and convey that parents can bring joy to their kids by purchasing the game.
5. Device type
The next segmentation variable falls into the behavioral bucket. Specifically, categorizing consumers by device type allows you to determine whether your customers connect with your brand via mobile or desktop devices. Using this segmentation criterion, you can determine which channels will produce the strongest ROI and develop more effective marketing campaigns.
Let’s say that 75% of your traffic originates from mobile devices. In this scenario, it would be vital to optimize all of your content for viewing on mobile devices. You could take this a step further by focusing most of your marketing efforts on mobile-centric channels, such as social media platforms.
6. Cart abandonment
Cart abandonment is another behavioral segmentation criterion. Tracking cart abandonment rates is a great first step. But you can also actively retarget individuals who have abandoned their carts by first segmenting them into a separate audience, then incentivizing them to complete their purchase using email-based advertising. This tactic will lower your cart abandonment rate and increase total sales volume.
Let’s say that you analyze your cart abandonment rate and find that about 20% of prospective customers leave your website during checkout. You could set up automated email marketing campaigns and retarget these individuals by sending them messages encouraging them to finish the purchase. If you really want to pump up your sales figures, include a discount or free shipping coupon in the email to make the offer even more appealing.
7. New customers
The new customer variable falls into the behavioral segmentation model. Segmenting new customers into their very own group helps audiences better target individuals in the early stages of the purchasing journey. New customers (or new leads) require more nurturing than repeat buyers who are already loyal to the brand. By segmenting new customers into a specific category, businesses can more effectively create top-of-funnel content that facilitates lead generation.
For instance, let’s say that you want to develop some top-of-funnel content to increase brand awareness. This content should focus on introducing your brand and its product, highlighting your company values, and demonstrating why a consumer should consider purchasing your goods. If your ad resonates with consumers, they will be eager to learn more about your brand, giving you the opportunity to follow up with mid-funnel content.
8. Repeat customers
Repeat customers are individuals who have made purchases from your brand in the past and are back for more. Marketing to these individuals can be easier because they are already familiar with your brand. Segmenting customers using this behavioral variable allows you to create content that jumps right into your value proposition. These ads should be concise, purposeful, and include a strong CTA.
Since you probably already have repeat customers’ contact information, you have plenty of options when it comes to creating content. A great approach involves targeting them with paid ads that highlight a product similar to items they’ve purchased in the past. Alternatively, you can notify them about a newly released item via email and include a coupon or discount code to thank them for being loyal customers.
9. Top purchasers
Top purchasers are extremely loyal customers who regularly buy, visit your site, and browse your offerings. These customers are something special and have a high lifetime value. Segmenting customers based on this behavioral criterion gives you a chance to show your appreciation and nurture feelings of loyalty toward your brand.
The easiest way to market to these individuals is to give them exclusive offers and discounts. You could also develop a rewards points program that allows them to unlock additional discounts by meeting certain purchase volume thresholds.
Lifestyle segmentation is a combination of demographic and behavioral models. Using these criteria to segment audiences enables you to pinpoint prospective customers who have high interest in the products and services you offer. Lifestyle segmentation will help you avoid advertising to consumers who either have no interest in your products or cannot afford them.
For example, luxury car manufacturers often use lifestyle segmentation to target top earners. They identify top earners by analyzing factors like their age, education level, occupation, and, if available, past spending habits. From there, they can create ads that mirror this individual’s interests and tastes. This may mean showing someone in the same age range attending a luxurious party, wearing a high-end watch, and ultimately exiting the venue and driving away in the brand’s flagship vehicle.
The source customer segmentation example is similar to the device variable. However, this one gets a little more granular. When using a source to segment customers, you are grouping people based on which channel they used to connect with your brand, such as Facebook, Instagram, or Google. Source segmentation helps you determine which channels are most popular among your target audience so that you can prioritize them in future campaigns.
Let’s say you conduct an analysis of your total site traffic and find that 40% of your visitors arrive via Instagram Ads, but only 5% find your brand on Facebook. However, your ad costs on each channel are about equal. These statistics reveal that your target audience is far more active on Instagram, meaning you should probably reallocate some of your Facebook marketing funds to the former platform.
Income is a good indicator of how much money an individual can spend on goods or services. But this demographic factor doesn’t provide a full view of an individual’s purchasing power. For example, an individual who makes $150,000 per year has far more disposable income than a family of four with the same household income. Still, targeting high-income individuals is a good approach for boosting sales, especially if you offer high-end or luxury products.
Let’s say you analyze the average income of your customers and find that the majority of them make upward of $80,000 annually. Targeting such individuals with the majority of your marketing efforts would likely be a good idea. However, that does not mean that you should completely ignore consumers who fall below that threshold, especially if your products perform well among that audience as well.
Segmenting customers by their birthday is an extremely popular strategy, especially among brands that sell low-cost consumer goods, such as clothing, apparel, and makeup. This approach builds customer loyalty by allowing you to message them on their birthday and keep your brand personally relevant to them. That’s what we call a win-win.
By using this segmentation criterion, you can create custom mailing lists and reach out to all your past customers on their special day. Let them know you are thinking about them, wish them well, and while you are at it, include a coupon or discount code. What better way to show them you care than by making your products a little more affordable?
Modern consumers are extremely conscious of the values and beliefs of the brands with which they do business. While each audience segment will prioritize a unique set of values, one that appears to be nearly universal is an interest in sustainability. By segmenting customers who are passionate about conserving natural resources, you can appeal to these individuals’ values using targeted ad campaigns.
For instance, as an environmentally conscious brand, you recently released a product that is partially produced using recycled plastics. To showcase how your company is doing its part to reduce its impact on the world around us, you create an ad campaign that provides some statistics breaking down just how much plastic waste you are eliminating via your efforts.
Using the psychographic model to segment customers based on their interests may seem obvious. Of course, you want to target customers who are interested in your brand and its products. But you can also use this factor to identify customers who are interested in things that don’t directly relate to your industry. This can expand the reach of your content and help you acquire more leads.
Let’s say that you sell a healthy, delicious snack bar. Through market research, you find that a little over half of your customers drive SUVs and enjoy adventuring outdoors. Running an ad campaign that shows a fictitious customer exiting an SUV and approaching a hiking trail while chowing down on your product merges three of their interests. This approach makes your ads more relatable and can resonate well with audiences.
The location segmentation variable involves segmenting audiences based on where they live. International brands can group audiences by the country they reside in and then create nation-specific marketing content. Alternatively, a domestic brand can segment audiences based on smaller geographical areas, such as cities or counties.
For instance, let’s say that your business primarily operates in San Diego, and you want to expand to San Francisco. You could create a new customer segment that only includes San Francisco residents and develop marketing content directed at and targeted to these individuals. This approach would get your content in front of San Francisco consumers and help you gain a foothold in The Golden City.
17. Reengage active customers
By using behavioral segmentation, you can identify active customers. Even though these individuals are already active, you can bolster their lifetime value and increase their order frequency through a little proactive marketing.
A great way to re-engage active customers is to target them with current deals and specials during checkout. For instance, a clothing company might display a sale on shirts when an existing customer logs into their account and adds jeans to their cart. Doubling down on new customers can add unnecessary friction to the checkout process, but using these tactics with active buyers can boost average order value.
18. Preferred language
There are multiple ways to use this psychographic segmentation variable. You can segment customers based on their preferred linguistic tone and style. Alternatively, if you market to international customer groups, you can segment them based on the language spoken in each region or nation.
A company that engages in both B2B and B2C sales would find language segmentation very useful as well. Such a company might use informal, casual language when communicating with B2C audiences. Conversely, they might transition to more formal, professional syntax when developing content for B2B decision-makers.
19. Most viewed products
Dividing audiences based on which products — or classes of products — they view is a great behavioral segmentation tactic. This approach allows brands to retarget consumers or site visitors with ads that highlight products they are most interested in. In turn, this increases the efficacy of retargeting efforts and promotes better engagement.
Let’s say that a cosmetic company decides to use this segmentation strategy. They can create groups based on how frequently individuals view products like eyeliner, textured hair care, and dry shampoo. The brand can then create unique content for each group to showcase products in each respective category.
20. Coupon lovers
Some customers just love coupons and discount codes. Individuals who fall into this category are often willing to spend more just to unlock a discount, coupon, or other savings opportunity. Identifying and marketing your brand to coupon lovers is a great way to gamify the shopping experience and increase sales.
For instance, why not offer a 5% or 10% discount if customers spend $100 or more on your products? Customers who enjoy unlocking coupons will likely purchase additional items to reach the discount threshold. They feel as though they are getting a great deal, and you sell more products.
Using religion as a psychographic segmentation criterion can be tricky. But consumers are passionate about their beliefs and the important events that they celebrate in accordance with those beliefs. By marketing to specific religious groups in the days or weeks preceding an important holiday, you can increase sales and demonstrate respect for their belief system.
Christmas is a prime example. Just about every brand that sells consumer goods offers some of their best deals between Black Friday and the weeks leading up to December 25. Doing the same can help you attract customers and increase profitability as you wrap up the fourth quarter of your revenue cycle.
How to manage your customer segments with the right software
Ensuring that your marketing efforts are reaching the correct audiences can be tough. But you can make this task far more manageable by breaking down your customer base into segments to focus your outreach efforts.
Now that you have a sizable list of customer segment examples, you can evaluate which ones best align with your company’s goals and start optimizing your marketing strategy.
The customer segment examples outlined above can help you build your marketing strategy and more effectively target customer groups within your target audience. However, if you want to put these customer segment examples to good use, you will need the right software in place.
Adobe Audience Manager empowers your marketing team to create and activate ideal audience segments for your brand. You can engage with them on any channel or device using captivating media, thanks to our best-in-class data management platform.