Customer segmentation is the process of splitting your customer database into smaller groups. By focusing on specific customer types, you will maximize customer lifetime value and better understand who they are and what they need. Typically customers differ in terms of:
- products they are interested in,
- marketing channels they interact with (e.g. offline media like TV and press, social networks etc.),
- the maximum amount they can pay for a product (willingness to pay),
- types of promotions and benefits they expect (discounts, free shipping),
- buying patterns and frequency.