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Customer Segmentation Examples: How Companies Win

Customer Segmentation Examples: How Companies Win

The North Face and Netflix Deliver Superior UX

Customer segmentations are a powerful tool that allows companies to understand the distinct motivations, attitudes and needs of their consumer base when purchasing their category.  By gaining a robust understanding of distinct consumer demand groups,  companies can improve their communication, portfolio, and innovation strategies.  Below are some customer segmentation example questions that can be addressed:

  • What consumer segments are the most valuable to your brand(s)?
  • What functional and emotional benefits matter the most to target consumers?
  • Are there any unmet needs?
  • Are brands within your portfolio reaching different consumer segments and/or satisfying different needs?

Some of the largest companies that have built some of the most iconic brands in consumer package goods –  P&G, Unilever, PepsiCo  – have historically used customer segmentation to ground their business strategy and identify growth opportunities.

According to P&G CEO David Taylor,  the consumer is at the center of everything they do. 

“Ultimately, it’s about winning the consumer value equation, it’s working with our customers and working very hard to create and build categories as the key driver of growth, because if we do that, it’s a very sustainable strategy.”

It’s a simple concept. By understanding your consumer base and their needs, you are better able to position your brand for growth. You’ll create the right messaging, highlight the right elements in packaging, tailor online user experience, and develop products that meet various occasion needs.  Without this basic foundational understanding, you are throwing darts in the dark – some of them will hit the mark by pure luck, and others will not. 

There are different types of customer segmentations examples.  Below are two examples of industry leaders using psychographic and behavioral-based segmentation in a very practical way, by optimizing the online user experience (UX) of their target consumers.  

Customer Segmentation Examples:  The North Face 

The North Face is a growing $2 billion outdoor brand that leverages psychographic customer segmentation for targeting both urban consumers and outdoor enthusiasts online.  Their website clearly highlights the different consumer groups they are after, each with different motivations for using outdoor apparel and gear.

Urban consumers want performance for their everyday use. 

Customer Segmentation Examples: How Companies Win

While outdoor enthusiasts want reliable performance gear that they can take on their outdoor adventures. 

Customer Segmentation Examples: How Companies Win

When shopping online, consumers can choose the profile that best speaks to their need and see relevant product offerings.

Customer Segmentation Examples:  Netflix

Netflix is a $25 billion brand that uses behavioral-based customer segmentation and machine learning to tailor their product offering.  For each user, Netflix captures which shows a person watches, and then generates a set of genres and shows to recommend. 

This customer segmentation example uses viewer frequency and recency of shows watched to customize content and create a superior user experience.

Customer Segmentation Examples: How Companies Win

Both of these two customer segmentation examples take different approaches: one leverages psychographics, and the other is primary-behavioral based.   Both are valuable and demonstrate how customer segmentations can be leveraged in very practical ways to deliver customized product offerings and superior online user experience.

For more customer segmentation examples, visit our resource page, or contact us to start a conversation.