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The Science of Customer Segmentation & CRM Strategy

Customer segmentation — a strategy where you divide your customer base into small groups that share similar characteristics — is a powerful marketing technique. Once you’ve segmented your audience into smaller chunks, you can target these groups with customer-centric marketing material that generates a huge return on your investment. CRM streamlines this process so you reach the customers who are most receptive to your products and services. Here’s why combining customer segmentation with CRM software benefits your brand.

1. Analyze Patterns and Trends

CRM collects pools of customer data and stores it in one place for easy reference. As well as being an important resource for your customer service team, CRM harvests customer data, such as a prospect’s location, interests and hobbies, purchasing behavior and age group, for your marketing staff. CRM software can then analyze patterns and trends in this data for effective customer segmentation. Manually slicing your customer base into sections won’t provide you with accurate results; CRM makes it easy to segment your demographic without any of the guesswork.

2. Determine the Lifetime Value of Your Customers

CRM helps you create predictive models that determine profitable customers based on their lifetime value (CLV), an important metric that calculates the net value of a future relationship with a customer. Using this software, you can ascertain which segments of your market have the highest CLV and deliver marketing material that resonates with these customers. You can also discover customers with a low CLV and use CRM data to find methods to increase their lifetime value. Segmenting your audience allows you to target different marketing to your high-CLV and low-CLV groups. You want to nurture low-CLV customers through your social media platforms, creating content that sets you apart from your competitors. Facebook, for example, lets you filter your posts based on gender, age, relationship status, interests and location. You can create a post that targets the bulk of your low-CLV customers and reach a cross-section of your demographic instantly. You can also address a specific audience on Google+ and LinkedIn.

3. Increase Sales

CRM boosts sales by 30 percent, according to Salesforce. Combining CRM software with a customer segmentation strategy can produce even more effective results. That’s because you reach the right customer with the right message at the right time, something you can’t do with generic “one size fits all” marketing. For example, CRM lets you target a customer with product suggestions based on his or her purchase history. Some of the world’s biggest brands use market segmentation to create local advertising campaigns that reach different portions of their demographic. These companies rely on CRM to sift through heaps of customer data, something that marketers can’t do manually. Pepsi, for example, divides its target market into different groups based on the “likes, dislikes, moods, preferences, fashions and buying habits” of its customers.

4. Increase Engagement

Engaged customers, for the most part, are more profitable customers. Eighty-six percent of buyers will pay more for a better customer experience, while customers who are fully engaged represent an average 23 percent “premium” when it comes to revenue, profitability and relationship growth compared to the average buyer. Using CRM for customer segmentation will help you separate your demographic based on common collective characteristics so you can engage with them on a deeper, personal level. Customer segmentation helps you understand the needs and behaviors of your customers so you can create marketing material that drives a higher rate of engagement. CRM provides you with useful insights into customer behavior and attitudes by tracking interactions, collecting sales data and analyzing trends among specific segments. You can send powerful marketing material to smaller groups who share similar traits, resulting in increased customer lifetime value, stronger sales and higher engagement rates.

Luxe Agency offers a holistic CRM solution that can be customized according to your business requirements. Our CRM package comes with a free Premium Email Marketing Package that will give you access to:
  • Free domain (based on availability)

  • free landing page (design & development)

  • up to 50,000 email sends

  • up to 10 email campaigns (design & development) / month

  • monthly analytics report & analysis

  • dedicated account manager

  • crm integration / migration

With the ever growing technology trends, don't let your business fall behind, book your free consultation today.


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