Customer segmentation is a process where your business’s overall customer base is divided into groups that share traits. It helps focus your company’s selling strategy on those customers most likely to buy your product or service.
For example, a commercial insulation contractor segments its customers into three groups — residential renovations, new home builders, and commercial facilities — and finds that the commercial segment, though fewer in number, generates 65% of total revenue, leading it to focus marketing efforts there.
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