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Consumers have higher expectations from their interactions with businesses compared to the pre-pandemic era. Consumers now demand personalized experiences, seamless interactions, and omnichannel convenience. To stay relevant and competitive, businesses must prioritize understanding their customers’ preferences, behaviors, and needs. Businesses can utilize customer segmentation as a key strategy for achieving this, which can be significantly enhanced using Generative AI (GenAI) and advanced analytics tools.

Businesses that invest in GenAI-powered segmentation tools can achieve a deeper understanding of their customers, resulting more efficient marketing strategies, enhanced customer satisfaction, and ultimately, increased revenue.

Proper customer segmentation should include criteria such as: where they are in their customer journey, historical data, demographic, geographic, psychographic, and behaviorial factors.

Benefits of Detailed Customer Segmentation:

1. Formulating Effective Personalized Communication

Customer segmentation powered by GenAI allows for effective business-to-customer relationship management because it will enable businesses to have more flexibility to design a personalized approach based on gathered insights, such as the beliefs, attitudes, and motivations of the customer. This approach enables companies to engage customers with targeted interactions, whether through advertising, promotions, app notifications, emails, direct calls, messages, and more. Research from Econsultancy reveals that 93% of companies see improvement in conversion rates while personalization technologies recognizing customer intent, can increase profits by up to 15%, according to Gartner.

Using AI-powered tools like Nisum’s NoiseGrasp, businesses can forecast customer behavior with over 90% accuracy, enabling more calculated and personalized marketing decisions.

2. Effective Customer Segmentation Decreases Acquisition and Retention Time and Cost

Detailed customer segmentation also helps reduce the time and cost associated with customer acquisition and retention. By using AI-driven segmentation tools, companies can accurately predict customer behavior and make smarter, data-driven decisions regarding where to allocate resources. According to a SimilarWeb, Amazon and Temu are the most popular eCommerce sites. Their specialization in personalization and niche markets prove the effectiveness of targeted product development and marketing. Traditionally, to get to this level of precise marketing and product development, market researchers would lead customer research using surveys; however, AI-powered customer segmentation can reduce market researchers’ time and effort thereby increasing ROI. For instance, NoiseGrasp can solve key challenges such as maximizing ad spend efficiency and increasing the accuracy of forecasting, planning, and reporting, which can help businesses achieve efficiency gains of 10-20% or more.

The data  derived from customer segmentation can help identify customer needs and guide future promotional strategies, as well as the initial development phases of products and services. This holistic customer approach plays an important part in a customer’s experience and will help decrease customer acquisition and retention costs by creating a positive brand sentiment by sharing personalized products during outreach. 

3. Delivering the Right Content to the Right Customer 

According to research from Marketing Charts, “74% of respondents claim to get frustrated with websites when content, offers, ads, and promotions appear that are not aligned with their interests.” A major benefit of customer segmentation is that it eliminates nonspecific targeting. Customers are not one size fits all and blanket communication can lead to disappointing interactions with your brand, and in turn, waste resources and time due to an improper understanding of the expectations and needs of customers. According to a study by Campaign Monitor, segmented marketing campaigns result in a 760% growth in revenue compared to non-segmented campaigns.

Why Detailed Customer Segmentation is Crucial for Business Success

To thrive in today’s competitive market, businesses need to gather detailed customer data and use it to drive decisions. GenAI plays a pivotal role in this process, allowing businesses to segment customers with greater precision and respond to their unique needs.

GenAI can continually refinine and reevaluate customer segments learning from data inputs, ensuring companies stay aligned with evolving consumer expectations while remaining Agile in their marketing efforts.

Leverage Nisum’s Expertise in GenAI and Customer Segmentation

At Nisum, we specialize in helping businesses transform their customer segmentation strategies using advanced analytics and GenerativeAI. Contact us  today if you're ready to take your customer segmentation to the next level and make smarter, data-driven decisions.