Customers are significant assets to a brand, leading them to the top. Segmenting or grouping the vast customer base per different criteria eases marketing actions. Segmentation makes companies 60% more likely to comprehend customers’ choices, thus molding their offerings for tremendous success. The segments can be based on wide factors like location, industry, or based on demographics. The market provides tools to assist businesses in effective communication and marketing via seamless customer segmentation. Here is a walkthrough of 10 customer segmentation tools to help you pick the most suitable.
The best customer segmentation tool, Google Analytics, is a platform by Google designed to collect data from browsed apps and websites. It benefits the brands by providing insights into the number of visitors, their behavior, purchases, location, the type of device used, and numerous other information. The collected data is sent for processing, aggregation, and organization of data. The processing of data is controllable, thus not violating the privacy rules.
How to use Google Analytics for Customer Segmentation?
Open Google Analytics, the customer segmentation software, and look for ‘Reports’ on the left
Choose the Audience suite followed by selecting the Overview tab
Now add the segment field at the top of the page.
Create a new segment by clicking the option and renaming it
Select the type of segment required. The different options are
Demographics
Traffic source
Technology
Sequences
Behavior
E-commerce
Conditions such as custom variables, time, goal conversions
Date of the first session
Save the file with desired segments
Pros and Cons of Google Analytics
Pros
Wide integrability
Free of charge
Create customized goals
Training through Google Analytics Academy
User-friendly interface
Compatibility with electronic gadgets
Effortless trackability
Cons
Incomprehensible without technical knowledge
Clutter platform leading to confusion
Costly charge for the premium version
2. HubSpot
It is a CRM or Customer Relationship Management platform. It serves to unify the brands and customers. HubSpot provides sales, CMS, service, marketing and operations software for product development through customer experience management leading it to top customer segmentation tools.
How to use HubSpot for Customer Segmentation?
Choose the segmentation criteria such as demographics, website engagement, behavior data or other criteria
Create customer segments based on the above choice from contacts
Create a list and filter the customers according to segments
Automate the segmentation process according to behavior through workflows
Create personalized content through CRM, such as content and landing pages
Perform regular customer segmentation analysis and adjustment according to the results
Pros and Cons of HubSpot
Pros
Select criteria-based lists
Generate audience-specific campaigns
Seven customer segmentation models
Categorization option for individuals according to sales and marketing efforts
Increased customer satisfaction and loyalty
Cons
Lack of flexibility
Costly prices
Challenging implementation
Limited facilities in the free version
3. Mixpanel
Among the customer profiling tools, it is predictive analytics software providing data on digital products and user interaction. It helps web and mobile-based platforms’ visitor analysis. Mixpanel can successfully perform event-based tracking in a user-friendly manner.
How to use Mixpanel for Customer Segmentation?
Clarify the goal of segmentation to identify the required segments
Collect data from digital platforms through Mixpanel
Choose the segment based on product or service and perform target audience segmentation
Track customer engagement, behavior, or other segments with the specific product via Mixpanel
Curate personalized content and campaigns according to the segment analysis
Analyze the segmentation impact and progress reports.
The Klaviyo is software for automating marketing automation through CDP or customer data platform. It helps brands deliver personalized information through email and SMS. As a customer segmentation tool, it provides data storage and integration, segmentation and A/B testing.
How to use Klaviyo for Customer Segmentation?
Understand the purpose of segmentation for proper business growth and usage of customer segmentation tools
Collect the data from the database, websites, and analytical reports through the platform
Identify the required segments suitable for the business
Create the customized profiles, tags, and fields and organize the segments
Analyze the interaction between product engagement and segments
Accordingly, generate the campaigns and messages to boost sales
Measure the effect and decide on further steps based on customer segmentation analysis.
Pros and Cons of Klaviyo
Pros
Easy syncing with social media
Precise ad targeting
Create lookalike audiences for VIP customers
Create effective abandoned cart flow
Effortless customer attention seeking
Responsive email templates
Cons
Poor customer support
Steep learning curve
5. Intercom
It is a customer service solution aimed at faster issue resolution for the brand and one of the best customer segmentation tools. The ultimate consequence is customer satisfaction with a reduced workload for the employees. The software helps in website traffic analysis, subsequently providing targeted content.
How to use Intercom for Customer Segmentation?
Begin with goal identification followed by data collection for segmentation
Identify the suitable domain of segmentation
Segregate the segments depending on attributes, specific behaviors or events to act on target audience segmentation
Work on the communication methods by tailoring them as a group or segment specific
Reframe the segments depending on progress reports and analytics
Pros and Cons of Intercom
Pros
Set up is easy and quick
Diverse database with continuous updation
Easy integrability
Easy data linking
Best suited for larger brands
Cons
Slow and unresponsive customer support
Expensive software
6. Customer.io
Customer.io is automated messaging software and one of the best customer profiling tools for marketers. It provides an automated message campaign from a simple idea. It is helpful for push notifications, data-driven emails, SMS, and in-app messages.
How to use Customer.io for Customer Segmentation?
Begin customer.ai with different data sources to build the database for segmentation
Identify the requirements for directional progress in marketing
Choose and divide the customers through customer segmentation software into segments like behavior, psychographics, demographics or other segments
Direct the algorithms and AI models through examples for each chosen segment
Let the platform perform its function, and cross-check the generated list on completion
Explore and implement new ideas for personalized communication to intrigue the customers
Adjust the segments according to sales, digital traffic and customer segmentation analysis
Pros and Cons of Customer.io
Pros
Allow sophisticated campaigns
Create personalized messages
High engagement
Customer loyalty
Format replicability
Cons
Frail reports tools
Confusing segment setup
Jargon usage in the dashboard
7. Optimizely
It introduces itself as a digital experience software platform among the best customer segmentation tools. Their functionality and services focus on product and marketing teams striving to optimize the digital experience. They allow website personalization, web content management and other tasks.
How to use Optimizely for Customer Segmentation?
Start the customer segmentation by installing an optimized SDK for tracking and experimentation.
Choose from the list of segments to work forward
List the audience through the audience builder option for target audience segmentation
Check out the brand’s functionality aspect, design or messaging component for ideas to experiment to bring variation in offered services or products
Analyze the results through suitable parameters and take decisions accordingly for proper utilization of customer segmentation tools
Pros and Cons of Optimizely
Pros
Latest marketing strategies
Tracks customer preferences
Full stack development
URL targeting
Cons
Slow webpage loading
Flickering on asynchronous setting
API issues
Requires technology friendliness
8. CustomerLabs
CustomerLabs is CDP or Customer Data Platform well-suited for customer data analysis. As a customer profiling tool, it serves Software as a solution (SaaS), Business businesses, agency marketers and e-commerce companies. CustomerLabs offers personalized campaigns with developer intervention.
How to use CustomerLabs for Customer Segmentation?
Link the platform with wide options to act as a data source
Define the goal for segmentation and subsequently choose the criteria
Create and analyze the created list of segments with customer data
Market the information with unique and personalized preferences
Work on communication, provide good customer service and adjust the segments depending on the changes.
Pros and Cons of CustomerLabs
Pros
Easy identification and event registration site trackability
Better customer analysis
Taggability and core event identification
Targeting unregistered customers
Good customer support
Cons
Confusing UI/UX
Lacks implementation and use case videos
9. Segment
It is also a Customer Data Platform and customer segmentation software. Segment facilitates data collection and usage from digital platforms. It allows the collection, transformation, sending and archiving of first-party customer data. It will enable tracking regardless of device-mode tracking.
How to use Segment for Customer Segmentation?
The segmentation begins with database building and validation for accuracy and redundancy removal
Recognize the reason for segmentation and select the best-suited segments
Enlist the customers in segments with Segment
Communicate with them for information and feedback
Modify the segments depending on the need
Pros and Cons of Segment
Pros
Efficient class data layer and data management tool
Easy setup
Multiple control options
User-friendly interface
Trackability of basic and complex parameters
Cons
High pricing plans
Inability to track granular data
Unreliable customer support
Require API integration sometimes over plug-and-play
Visual Website Optimizer, or VWO, provides conversion optimization and A/B testing. It allows quality and quantity-based customer research. Additionally, users can expect experiment opportunities on digital properties.
How to use VWO for Customer Segmentation?
Create an account at VWO
Interlink VWO and the website through the entry of the tracking code in the website
Create different variations under the experiment to choose the best-suited variations
Use the segmentation feature for customer segmentation
Bring different variations for each segmentation and run experiments for random variation display to each segment
Monitor, evaluate, iterate and optimize the results based on generated data
Pros and Cons of VWO
Pros
Personalized website suggestions
Easy setup
Action-based or set criteria audience segmentation
Website traffic control
Cons
Require purchase for segmentation
Best features come at high pricing
Wrapping Up
AI Customer segmentation tools are a robust platform that is crucial to brand growth. Analyzing each activity benefits customers and organizations in delivering desired products and services. The market is filled with customer segmentation tools, each with pros and cons. The choice should be wise and based on brand requirements and dealing products. Keep following Analytics Vidhya blogs to stay updated with the world of AI and ML!
Frequently Asked Questions
Q1. What is a customer segmentation tool?
A. A customer segmentation tool is a software or program used to divide customers into different groups based on their characteristics, behavior, and preferences.
Q2. What are the 4 types of customer segments?
A. The four types of customer segments are demographic, geographic, psychographic, and behavioral. Demographic segmentation divides customers based on age, gender, income, education, etc. Geographic segmentation uses location-based data. Psychographic segmentation considers customers’ lifestyle, personality, values, and beliefs. Behavioral segmentation is based on customers’ buying behavior, usage, and preferences.
Q3. What are the 5 key customer segments?
A. The five key customer segments are loyal customers, price-sensitive customers, impulse buyers, potential customers, and discount customers.
Q4. What tools help with market segmentation?
A. Various market segmentation tools are available, such as survey tools, social media analytics, customer relationship management (CRM) software, customer feedback tools, and web analytics tools.
Q5. What is the most common segmentation tool?
A. The most common segmentation tool is demographic segmentation as it is easy to obtain information about customers’ age, gender, income, education, etc.
Q6. Which technique is used for segmentation?
A. Various techniques are used for segmentation, including clustering, factor analysis, decision trees, and regression analysis. However, clustering is the most widely used technique as it divides customers into groups based on their similarities and differences.
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