Customer Segmentation Criteria

Good customer cegmentation criteria are primairly based on shared customer preferences, a common customer pain or shared customer believes. To be of practical use for a company the following other criteria are of importance:

1. Substantial: The segment should result in a substantial size. Cluster the target market in a broad yet comprehensive set of seperate customers groups
   1. As a guidance, try to divide up your market in a maximum of 10 segments.
2. Measurable: The segment should be measurable
   1. As an example: When targetting 'undisciplined, extravagant spenders' it will be difficult to get a contact database...
3. Diffentiable: The segment should be differentiable, meaning that the different segments will respond differently to different elements of the marketing strategy.
   1. Distinghuising large, midsize and small companies is of no use if you all theat them the same.
4. Actionable: The segment should be actionable, meaning that it should be to formulate an appropriate marketing strategy for each segment.
   1. If your salesforces does not understand the terminology and implications of the marketing strategy, the segmentation is inadequate
5. Unique: The segmentation strategy should be unique. You must challenge yourself to have a different view of the market than your competitors.
   1. Thinking differently will identify new opportunities sooner.
6. Attractive: depends on:
   1. Size of the segment
   2. Growth rate
   3. Structural attractiveness