What are target customer segments?

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What are target customer segments and explain using a target customer group example?

Digital Product Management - 4

In this article, we will learn about the target customer segments. We will see a sample example of the target customer segment with the help of the customer persona. This is the Second element of Product Strategy.
In the last article, Digital Product Management - 3, we learnt about elements of Product Strategy and discussed the first element which is product vision.

What is Customer target Segmentation? (2nd Element of Product Strategy)

Customer target segmentation is the process of segmenting the target customer based on different characteristics like geography, Demography, Psychography and Behavior.
These characteristics help us to identify what is the exact customer we want to target. This helps us to provide the correct value proposition to the customer.
The four major segments are as follows:

Demographic

The demographic is one of the major characteristics that define the customer segment. Demographic includes Age, Gender, Race, Income, Gender, Education, and Religion. 

Geographic

Geographic is a second characteristic that defines the customer segment. Geographic includes City, Climate, Communities, Size, Countries etc.

Psychographic

Psychographics is the third characteristic that defines the customer segment. Psychographics includes Pain Points, Budget, Attitudes, Roles, Beliefs, Social & Cultural norms etc.

Behavioural 

Behavioral is the fourth characteristic that defines the customer segment. Behavioural includes social media styles, media consumption, Habits, Hobbies etc.

Why customer segmentation is important?

Customer segmentation is very important for any company to grow or improve upon because customer segmentation will decide the kind of product, Packaging, Price, and Promotion.
For example, if our targeted customer segment belongs to Metro, then the product features, and pricing will be different if it would have been the Non-Metro.
A company may not necessarily have a single customer segment. The company can have a primary segment and can have secondary segment as well. The secondary segment may be smaller but can have huge growth potential. 

What is Customer Persona & How do we create it?

A customer persona is the representation of a customer profile. It is very important for a product manager to have Customer Persona always in mind because it will help them to create empathy so that they can always think customer-centric and the product and related decisions should be around the customers.
There can be multiple customer personas for a product and these customer personas can be created by quantitative methods like clustering of different behaviour parameters as well.
But broadly it is better to use both qualitative and quantitative research to come up with Customer Persona.

To create a user persona, you can do the following things
  1. First, start with a Name "XYZ" to the user persona so that the user persona feels like a real human being.
  2. You can also have a nice photo for representation of the persona, it helps to give a quick comprehension and connection to the user persona.
  3. Then start with a Bio, this will help you to internalise the user persona in a better way.
  4. Then start putting the demographics of the user persona, we have already discussed the importance of the demographics in customer segmentation.
  5. Then start adding motivations and goals. These will be the wants and needs of the user persona, this is important because these are the needs and wants that we can target to provide a good value proposition.
  6. You should also add some behavioural examples of the user persona.

Customer Persona Example (Senior Secondary School Student)




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