35 Customer Segmentation Terms for Business

35 Customer Segmentation Terms for Business

35 Customer Segmentation Terms for Business



Welcome to the world of customer segmentation!

As a business owner, understanding your customers is essential for success. That’s where customer segmentation comes into play.




  1. Demographics – refers to characteristics such as age, gender, income, education, occupation, and more that are used to segment customers.


  1. Psychographics – involves understanding customer’s values, attitudes, personality traits, interests and lifestyle choices.


  1. Behavioral segmentation – focuses on customer actions and behaviors towards a product or service.


  1. Geographic segmentation – divides customers based on their location, such as city, country or region.


  1. Firmographic segmentation – a B2B approach that segments customers by company size, industry, revenue and other business-related factors.


  1. Customer lifetime value (CLV) – a measure of the monetary value a customer brings to a business over their entire relationship.


  1. Churn rate – the percentage of customers who have stopped using a product or service within a specific time period.


  1. Customer retention rate – the percentage of customers that continue to use a product or service over a given time period.




  1. Customer acquisition cost (CAC) – the cost associated with acquiring a new customer, including marketing and sales expenses.


  1. Conversion rate – the percentage of potential customers who take a desired action, such as making a purchase or signing up for a service.


  1. Average order value (AOV) – the average amount of money spent by a customer per transaction.


  1. Customer satisfaction score (CSAT) – a measurement of how satisfied customers are with a product or service.


  1. Net promoter score (NPS) – measures the likelihood of customers to recommend a product or service to others.


  1. Customer effort score (CES) – measures the ease of customer experience with a company’s products or services.


  1. Customer persona – a fictional representation of an ideal customer based on data and market research.


  1. Market segmentation – the process of dividing a larger market into smaller groups based on common characteristics.


  1. Target market – the specific group of customers that a product or service is aimed at.


  1. Market niche – a smaller, specialized segment within a larger market with specific needs and preferences.


  1. Mass marketing – an approach that attempts to reach the entire market with a single marketing strategy.


  1. Differentiated/segmented marketing – targeting multiple segments of the market with different marketing strategies.


  1. Concentrated/niche marketing – focusing on a specific segment or niche within the market with a tailored marketing strategy.


  1. Micromarketing – targeting individuals or small groups of highly targeted customers with personalized marketing messages.


  1. Crossselling – promoting complementary products or services to existing customers to increase sales and customer retention.



  1. Upselling – encouraging customers to upgrade or purchase more expensive products or services.


  1. Loyalty programs – incentivizing customers to continue using a product or service through rewards and discounts.


  1. Customer advocacy – the promotion of a brand by satisfied customers through word-of-mouth marketing.


  1. Brand loyalty – when customers repeatedly choose a particular brand over others due to positive experiences and satisfaction.


  1. Transactional segmentation – dividing customers based on their buying habits and purchase history.


  1. Attitudinal segmentation – categorizing customers based on their attitudes and opinions towards a product or service.


  1. Benefit segmentation – grouping customers based on the benefits they seek from a product or service.


  1. Usage rate segmentation – segmenting customers based on how frequently they use a product or service.


  1. Occasion segmentation – targeting customers based on specific events or occasions that may influence their purchasing behavior.


  1. Price sensitivity segmentation – dividing customers based on their sensitivity to price and willingness to pay.


  1. Geographic/demographic psychographic clustering (GDPC) – a combination of geographic, demographic, and psychographic data used for customer segmentation.


  1. Multivariate analysis – a statistical technique used to identify patterns and relationships between multiple variables, often used in customer segmentation.




In conclusion, customer segmentation is a crucial aspect of any business strategy. By dividing your customers into different segments based on their characteristics and behaviors, you can tailor your marketing efforts and improve the overall customer experience.

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