The Best Way to Classify and Segment your Customers

The characteristics of customers can vary depending on status, volume of purchases in a given period (for example, annually), seniority, and frequency of purchases, product lines, and degree of influence. I.e., etc. Choosing which criterion to use depends on the aspects that are considered to be decisive for the company and that can enrich its analysis.

In this sense, the client classification will allow for segmentation and selection of strategies to be applied, activities to be conducted, and, ultimately, the effort and resources to be dedicated to each type of client depending on the kind of relationship that one wishes to have with them. By analyzing clients by type, the analyst can identify those clients that are most likely to grow and sustain the business. As you can see, classification is a vital skill for being able to do business well and now it more easily with the free form templates. How should they be classified?

The following is the most common classification according to status:

1. Customers currently on board. These are people and companies that purchase from your company on a regular basis. You can’t survive without them.
2. A frequent buyer is someone who regularly purchases from the company and does so in the past or recently. There is a specific period of time for each type of business or product.
3. At some point, we may be able to use these clients again, after analyzing the cancellation reason, the frequency of purchases, and other things.
4. They are those who have not made purchases from the company, but who have shown interest through the request for information, request for a budget, and who have purchasing power and can become income generators for the company at any time.
5. Our clients are those who haven’t purchased from us and haven’t expressed any interest in doing so.

It is important to start with the 80-20 rule, which says that 20% of your customers make up 80% of your sales. We would categorize them as follows based on this:

1. Top Clients. They are those clients that generate a volume of sales well above the average. These should be the least. The interesting thing about knowing them perfectly is that we can define our efforts and resources based on said criteria.
2. Large Customers. Clients that generate a medium-high sales volume. They are important, but they do not represent the volume of the Top.
3. Medium Clients. They are those clients that generate an average sales volume.
4. Low Clients. They are those whose sales are well below average.

Another way to classify our customers would be through the frequency of purchase. The ideal is to determine an average purchase frequency, and from there to classify our customers:

1. Frequent customers. It is very important to take special care of customers who buy frequent and give them preferential treatment that makes them feel valued and thus maintain their level of purchases.
2. Regular customers. These should be maintained with an excellent level of satisfaction by generating activities that promote an increase in frequency.
3. Occasional customers. Although it is true that occasional clients deserve to receive good service like any client, the level of investment and attention to be allocated will be less than that provided to the most profitable clients for the company.

Once we have classified our clients, if we want to develop an effective marketing strategy, we must carry out segmentations. To do this, it must be taken into account that, despite having classified our clients, each client is in the group they are in, has unique and different needs and interests. The ideal would be to be able to communicate face-to-face with them, however it is not practical. To do this, what we need to do is group our clients based on certain variables. That is, segment them.

In order to segment our customers, it is necessary to have a database (CRM) that collects at least sales, what products have been purchased, frequency and quantities. But in addition, we must collect in that database (CRM), information related to marketing, such as demand potential, evolution and trends of the market or online recruitment channel, among many others.

In the case that it is segmentation of companies, we should also collect information such as activity, volume, where it is located or where it operates, characteristics of the decision maker, etc. Finally, in order to complete this segmentation, it is necessary to use multivariate statistical techniques or data mining for data analysis.

In the end, what we are looking for with segmentation is to know the type of clients we have, and the strategy that we can follow with each one of them. This is what we would call strategic segmentation.