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Customer Segmentation for Small Businesses

Customer Segmentation for Small Businesses

Customer segmentation for small businesses is categorizing customers into different groups based on their interests and/or features. Segmenting customers helps to target better, increasing user experience and conversion rates and boosting customer relationships. On top of that, customer segmentation prevents marketing budgets from being wasted by delivering irrelevant messages to an uninterested target audience.

In this article, we’ll explain how small businesses can segment customers in SMS marketing and strengthen their customer engagement. 

What are the common customer segments?

  1. Demographic customer segmentation

  2. Behavioral customer segmentation

  3. Location-based customer segmentation

  4. Interest-based customer segmentation

These were the most common 4 customer market segments. In the following parts, we’ll delve into the details of each customer segment and show you how you can use them within your SMS marketing campaigns.

1. Demographic customer segments

Demographic customer segments play a crucial role in SMS marketing. By categorizing customers based on factors such as age, gender, religion, marital status, income level, education, and more, businesses can fine-tune their approach for more effective communication.

Consider a clothing brand with both masculine and feminine lines. Leveraging demographic segmentation, you can design unique SMS marketing campaigns, ensuring that messages resonate specifically with different gender identities. This approach delivers a personalized and engaging experience, enhancing the overall customer interaction with your brand. Here are two message examples to use in demographic customer segmentation:

Hey Fashionista! 🛍️ Explore our latest styles tailored just for you. 🚀 Check out our feminine clothing line and enjoy an exclusive offer on your next purchase. Click now: [Link]
Gentlemen, Upgrade Your Style! 👔 👞 Discover our masculine clothing collection designed to elevate your look. 🌟 Don't miss out on the latest trends – shop now and enjoy an exclusive discount. Tap here: [Link]

2. Behavioral customer segments

Behavioral customer market segments in SMS marketing focus on customer engagements, capturing various interactions and preferences. Here are some behavioral segments:

  • Customers who add items to their cart but then abandon it.

  • Customers who made a one-time purchase.

  • Customers who used your SMS coupons once.

  • Customers who frequently use your SMS coupons.

  • Customers who exclusively purchase high-segment items.

  • Customers actively engaging with your social media channels.

  • Customers who visit your brick-and-mortar store.

  • Customers who prefer online purchases.

  • Customers making regular holiday purchases.

  • Customers spending the most time on your website/store.

  • Valued and loyal customers.

  • Customers requiring special attention, such as those who provide feedback or express concerns.

For instance, consider a segment of customers who prefer in-store purchases. Encourage them with exclusive store-only coupons through effective bulk messages like this:

Hi Carrie, we've missed you! Visit us soon and enjoy a 15% discount on your purchase with coupon code CARRIE15. Valid until April 3rd. Looking forward to your visit! - [Company Name]

Alternatively, create a segment for customers who frequently shop during holidays. Target them with a personalized holiday reward card campaign:

We know you love making holidays special with our exclusive products. Claim your holiday reward card at the store, fill it out by year-end, and kick off the new year with a free product from us. Happy holidays! - [Business Name]

3. Location-based customer segments

Location-based customer segmentation in SMS marketing involves categorizing customers based on their geographic locations. While it may seem straightforward, the effectiveness, especially for local businesses, is profound. This segmentation allows for the creation of location-specific offers, targeted ad campaigns, SMS marketing initiatives, and more.

Moreover, demonstrating that you understand and care about your customers' whereabouts can significantly enhance engagement. For instance, in the unfortunate event of a fire in a specific neighborhood, having a location-based customer market segment enables you to convey heartfelt messages promptly. These instant gestures can easily create emotional bonds, but successful implementation relies on prior preparation through the establishment of customer segments and a robust SMS marketing service.

4. Interest-based customer segments

Interest-based customer market segmentation in SMS marketing is all about understanding what your customers desire from your brand. By delving into their interests, you can tailor your communication to resonate with different customer preferences. Take, for example, a florist business. Here are potential interest-based segments:

  • Customers keen on promotions.

  • Customers exclusively interested in free shipping offers.

  • Customers seeking insights into plant care tips.

  • Customers who frequently send flowers as gifts.

  • Customers making regular self-purchases.

  • Customers intrigued by houseplants.

  • Customers fascinated by vases.

  • Understanding and catering to these varied interests allows for more personalized and effective SMS marketing campaigns that truly resonate with each segment of your audience.

Understanding and catering to these varied interests allows for more personalized and effective SMS marketing campaigns that truly resonate with each segment of your audience.

How to segment customers within SMS marketing?

Segmenting customers within SMS marketing is as easy as learning more about them and utilizing different text keywords. Here's a bit more detail below. ;)

To understand your customers better, ask questions about their interests and traits when collecting SMS opt-ins. If you already have their opt-ins, don't worry; there's an effective way to gather market segmentation data: Mass text messaging. Incentivize them with valuable discounts and create an online survey, then send them a text inviting them to participate. Remember, it's an investment in long-term customer relationships. Here's an example to kick off customer segmentation:

Hey Dennis, want a 45% discount from [Company Name]? Fill out this 1-minute survey and snag your discount instantly. [Customer Segment Survey Link]. Have a good one!

After collecting your customers' trait data, you can manually create multiple bulk messaging groups for each customer segment or utilize the text keyword feature. With text keywords, assign a different keyword to each customer segment group. Promote these keywords in-store or online, and have customers text you the keyword they are interested in.

💡 Dive into a complete guide: Text keywords & Auto-reply messages

In this article, we delved into various customer segmentation types, provided examples, shared message strategies, and detailed how to effectively segment customers in SMS marketing. We trust these market segmentation insights will empower your marketing strategy.

Happy Messaging!

The Pony Express HQ Team

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