Definition
A four-step process for the classification of target groups by client needs and purchasing behaviour (rather than geography or sales); an effective breakdown must meet both clear and predictable grounds for distinguishing and predicting client behaviour.
In detail
Customer Segmentation is a four-step process that divides the market into distinct groups based on customer needs and purchasing behavior, rather than simply by geography or sales volume. Effective segmentation must simultaneously meet two conditions: being clearly distinguishable and able to predict customer behavior. In the growth system, it is used to identify high-value customer groups, guide product development and marketing strategy, and is closely related to strategic planning and Voice of Customer (VOC). Outputs include segmentation models and customer profiles.
Example in practice
An industrial equipment manufacturer found that customers in different industries had vastly different after-sales service needs. Through interviews and data analysis, they divided customers into three categories: 'price-sensitive,' 'performance-oriented,' and 'service-dependent,' and verified behavioral differences for each category. Accordingly, they adjusted product configurations and service packages to improve customer satisfaction. Finally, a segmentation report was output to guide market strategy.