KYC - Know Your Customer
KYC - Know Your Customer
Classifying and categorizing customers, consumers, audience, buyers, and clients is essential for segmentation and market research. Effective segmentation helps target specific groups, improve marketing strategies, and meet customer needs better. Here's how you can do it:
Classification Criteria
You can classify individuals or organizations based on these primary criteria:
a. Demographics
- Age: Group by generations (e.g., Gen Z, Millennials, Baby Boomers).
- Gender: Male, Female, Non-binary, etc.
- Income: Low, Middle, High-income segments.
- Education Level: High school, Bachelor's, Master's, etc.
- Occupation: Professional, Student, Retired, etc.
- Family Status: Single, Married, Parents, etc.
b. Geographic
- Location: Country, region, city, or neighborhood.
- Urbanization: Rural, suburban, urban areas.
- Climate: Cold, temperate, tropical regions.
c. Psychographics
- Lifestyle: Fitness enthusiasts, tech-savvy individuals, eco-conscious people.
- Values: Family-oriented, adventurous, luxury-seekers.
- Interests: Hobbies, preferred activities, or entertainment choices.
- Personality: Introverted, extroverted, risk-averse.
d. Behavioral
- Purchase Behavior: Frequency of purchases (one-time, repeat, or loyal).
- Usage: Light, moderate, or heavy users of a product/service.
- Occasion: Special occasions, seasonal purchases, or everyday use.
- Loyalty: Loyal customers vs. price-sensitive customers.
- Engagement: Active or passive interactions with your brand.
e. Firmographics (For B2B Segmentation)
- Industry: Healthcare, retail, IT, manufacturing, etc.
- Company Size: Small, medium, or large enterprises.
- Revenue: Annual revenue or profit levels.
- Geography: Local, regional, global operations.
- Decision-Maker Role: CEO, manager, procurement officer, etc
Data Collection for Segmentation
Use various methods to collect the necessary data:
- Surveys and Questionnaires: Collect demographic and psychographic data directly from customers.
- Customer Data Analysis: Use CRM systems to analyze behavioral patterns.
- Web Analytics: Tools like Google Analytics provide insights into geographic and behavioral data.
- Social Media Monitoring: Understand interests, lifestyles, and brand engagement.
- Purchase History: Identify patterns in buying behavior and product preferences.
- Market Research Reports: Leverage third-party reports for firmographics and industry trends.
Categorization Frameworks
Once you've collected the data, use these frameworks for classification:
a. RFM Segmentation (Recency, Frequency, Monetary)
- Purpose: Classify customers based on their buying behavior.
- Categories:
- Recent buyers: Purchased recently.
- Frequent buyers: Make frequent purchases.
- High-spenders: Spend more per transaction.
b. Value-Based Segmentation
- Purpose: Segment by customer lifetime value (CLV).
- Categories:
- High-value customers: Most profitable.
- Mid-value customers: Moderate profitability.
- Low-value customers: Least profitable but potential for growth.
c. Needs-Based Segmentation
- Purpose: Categorize based on what customers need or want.
- Categories:
- Price-sensitive buyers.
- Quality-focused buyers.
- Convenience-seekers.
d. Behavioral Segmentation
- Purpose: Group customers by actions.
- Categories:
- Browsers: Visit but rarely purchase.
- One-time buyers: Purchased once.
- Repeat buyers: Loyal customers.
Example of Segmentation in Action
Scenario: E-Commerce Business
- Demographic Segmentation:
- Young adults (18–25), middle-aged professionals (26–40).
- Geographic Segmentation:
- Urban customers vs. rural customers.
- Behavioral Segmentation:
- Festive shoppers vs. regular buyers.
- Psychographic Segmentation:
- Eco-conscious buyers vs. fashion enthusiasts.
#MarketResearch #CustomerSegmentation #TargetAudience #MarketAnalysis #BusinessInsights #CustomerJourney #ConsumerBehavior #AudienceTargeting #DemographicAnalysis #MarketTrends #EcommerceInsights #CustomerRetention #BrandLoyalty #UserExperience #MarketingStrategy #TargetMarketing #BusinessGrowth
If you have read and appreciate the content and seek business, management or digital transformation consultation reach out to us. We assess your business readyness to adopt technology and seek solution your current business pain/ need/ challenges reach out to us.
Aaruni Technology Solutions Pvt. Ltd. is SaaS & Business Process Automation company exclusively focussed on Healthcare, Wellness industries.
Read our blog articles
Digital Process Automation
How can we help you?
Contact us for Free Consultation on "How to adopt digital technologies to transform your business?