What is Customer Segmentation? Why it is Important for Startup?

Customer segmentation enables startup/companies to accurately target tailored marketing messages to customers who are most likely to buy their products. It is the practice of dividing a customer base into groups of individuals by using specific ways such as age, gender, interests and spending habits.

Why it is important for Startup?

Generally entrepreneurs got the product idea from their instinct or problems faced by them. But they are not sure about whether the product is actual fit to which customers.

Here are the major reasons for customer segmentation:

• Startup doesn’t have time, resource, money to validate the product for a long period. If you have taken the vast segments it is very difficult to validate your product.
• Every customer is different and that their marketing efforts would be better served if they target specific, smaller groups with messages that those consumers would find relevant and lead them to buy something.
• Get deeper understanding of their customers' preferences and needs with the idea of discovering what each segment finds most valuable.
• Helps to focus your marketing on the customers who will be most likely to buy your products or services.
• Easy to build loyal relationships with customers by developing and offering them the products and services they want.
• Avoid the markets which will not be profitable for you.

So finally the customer segmentation will help you to show a route map to your startup ride. It helps you to validate your product in a quick manner.If your product is validated you are in a safe boat else you are in an ocean looking for a boat. Product validation process will discuss later.

Image Ref: http://www.dynamicwebusa.com/blog/wp-content/uploads/2014/07/Customer-Segmentation.jpg

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