Market segmentation and customer segmentation differ primarily because market segmentation concentrates on your target market (potential customers), while customer segmentation concentrates on your present customers.

Market segmentation segments your potential customers from the whole market by considering demographic, psychographic, and behavioral characteristics that distinguish your potential customers from everyone else.

Customer segmentation enables you to target segments of your customers for special promotions. It provides a means of conducting customer research to build customer loyalty, while improving customer service and sales.

Customer Segmentation: Consumers and Businesses

One type of customer segmentation determines whether your customers are consumers or other businesses.

Customer Segmentation: Consumers

If your business markets directly to consumers, you have to know characteristics of your consumer customers. These characteristics are based on demographics such as age, occupation, education level, social class, gender and race.

Consumer customers’ needs are emotional and rational. So you should include both in your marketing campaigns. Consumers make purchase decisions based primarily on emotional appeals but need rational reasons to justify their emotional decisions.

You can read more about marketing to consumer customers at

Marketing A Direct-To-Consumer Distribution Business

Customer Segmentation: Businesses

Business customers have different needs than consumer customers. Business customers’ needs evolve around improving their businesses, while consumer customers’ needs evolve around their more personal values, attitudes, family relationships, wants and dreams.

Business customer characteristics are called firmagraphics and include size and age of the business, income, industry, number of employees, etc. It’s just as important to know firmagraphics for business customers as it is to know demographics for consumer customers.

Business customers make purchase decisions based on improving some part of their businesses. Although their purchases are more rational than consumers, emotional appeals are still important. The type of emotional appeals just differ from consumer customers.

For example, an emotional appeal for consumers may be to become more attractive to the opposite sex, while business customers are more interested in becoming more attractive to other businesses.

You can read more about marketing to business customers at

B2B Market Segmentation Improves Marketing

Customer Segmentation: Conclusion

Customer segmentation reveals the best appeals for you customers, and often the best potential customers to target.

So although market segmentation and customer segmentation are not the same, they have much in common. Both provide insights to improve your marketing and your business.

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Posted 10-15-08: Market Segmentation and Customer Segmentation

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