Customer Segmentation | Targeted Marketing Strategies with Data Science

Data Science

In this era of competitive business, it is essential to understand our customers’ needs and fulfill their requirements. Adding a personalized touch is necessary for implementing marketing strategies in our industry. Therefore, customer segmentation is the area that all companies must focus on. Customer segmentation divides the entire customer base into various groups based on multiple factors. Data science helps to separate this customer base. Data science helps to create targeted marketing experiences through customer segmentation. Read the complete article to know more about customer segmentation, the benefits of customer segmentation, and how data science helps in customer segmentation.

What Is Customer Segmentation?

As the name suggests, customer segmentation means forming various segments of the target audience based on standard characteristic features such as age, taste and preferences, gender, interests, etc. Customer segmentation helps to differentiate the customer base with different needs and preferences. It also enables you to know your customers better. It is always advised to shift towards customer segmentation from traditional marketing methods to implement a sound marketing strategy.

Using Data Science For Customer Segmentation

Data science includes various tools and techniques used for customer segmentation and plays an essential role in the interpretation of customer data. Data science methods, such as clustering algorithms, decision trees, and regression models, help in customer segmentation. Let us discuss these techniques in detail.

  • Clustering Algorithms: The clustering algorithm technique helps form various customer segments that carry the exact attributes. It includes data analysis such as purchase history, online activity, etc. It uses trends and research to form groups of customers. This approach helps the marketing specialists know more about their target audience and cater to their needs.
  • On the other hand, decision trees and regression analysis determine the relationship between various attributes of customer segments and the factors due to which the elements occur. Marketers can examine details such as gender, income, and age of customers to differentiate them.

Techniques To Implement Customer Segmentation Using Data Science

Data science courses in India help businesses implement the practice of customer segmentation effectively and efficiently. Below are some techniques that can be used to achieve customer segmentation with the help of data science –

  • You must collect data on customers from various reliable sources and use them in an integrated manner to predict their behaviour. This data includes demographic and behavioural data such as their search history, social media engagement, survey fill-outs, etc. All this information can give you a bird’s eye view of your customers and create appropriate customer segments.
  • The other most common technique of customer segmentation is to align the variables and attributes with the purpose of your business. You must select the right variables to form the correct customer segments. These variables can be in the form of age, gender, interests, and so on. 
  • After you are done adequately with forming customer segments, you must not sit idle. This is because the external environment is highly complex. Customers’ tastes and preferences are variable factors and can change from time to time. Therefore, you must monitor your customer segments and make suitable adjustments whenever necessary. The monitoring and refinement process will always keep your customer segments effective.

Role Of Business Analytics In Customer Segmentation

Business analytics refers to transforming raw data into meaningful results by applying data analytics, statistics, etc. Business analytics play an essential role in a business’s marketing strategies. Relying solely on segmentation is only appropriate for some companies. Therefore, business analytics courses in India can help students use data-driven techniques to better understand the target audience.

Business analytics not only helps businesses to make customer segments but also helps to predict the future of the segments formed. Knowledge of business analytics can act as a competitive advantage for any business and help it grow by targeting an appropriate audience.

Here are some ways in which business analytics contribute to customer segmentation –

  • Business analytics helps to automatically identify the complex relationship on which the entire target audience is based. Business analytics techniques also identify the hidden customer segments that can be possible and are possible apart from the traditional customer groups.
  • It is also used to observe historical data and forecast the future behaviour of the target group of customers. Businesses can use browsing history and other valuable data to help predict the customer needs of individuals. Companies can use this prediction to provide offers and enhance engagement with customers.

Benefits Of Targeted Marketing

Customer segmentation, with the help of data science techniques, offers various benefits such as –

  • Targeted marketing helps to increase and improve customer engagement. A strong connection with the customers can be built by providing personalized messages, offers, and so on. It also helps to create brand loyalty, which is essential for the business’s survival.
  • Targeted marketing also helps improve a business’s return on investment. By targeted marketing, you can reach people most interested in purchasing them. It helps increase the business’s turnover and hence increases its return on investment.
  • Targeted marketing also helps build brand loyalty and retain the business’s customers. It makes it difficult for customers to switch to other companies. When customers receive engagement from your business, they are reluctant to move somewhere else.


Customer segmentation and data science are just like the two sides of the coin. They need to be worked on simultaneously. You can use various data science techniques to analyze your customer base and deliver customer value. Targeted marketing gives multiple benefits, such as increasing customer engagement, return on investment, and higher conversion rates. Using various business analytics techniques can help you to automate the segmentation process. Therefore, every business must focus on customer segmentation to gain a competitive advantage over all the other companies.

Tags: Customer Segmentation

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