5 Ways to Effectively Segment Your Customer Database


Share    Tweet

As a small business owner, it’s crucial that you use a database to keep track of information about your customers.

The information you store in your database can help you make marketing decisions and strategically target customers based on demographic, geographic, and psychographic data.You can use the information you gather to plan email marketing campaigns, make new offers, improve lead conversion and even determine where you should focus most of your sales efforts.

Your database is a wealth of information and properly segmented, it should yield serious revenue opportunity for your business.


Here’s X ways to effectively segment your customer database

1.  You Know Your Database


One of the most common segmentation techniques is prospect and customer demographics. Criteria like: age, race, gender, hair color, location, income, education are all examples of person describing, demographic data.

Hair and eye color notwithstanding, it’s important to get solid demographic data for your database as it can be incredibly useful. Not only can you identifying trends that can lead to new sales opportunities, but also it can help you market properly to people based who they are.

For instance, Gen X prospects and clients are more likely have more money and or have a home to sell where millennials may be more likely to have less money and be home buyers.

Knowing demographic data is a crucial element to effective database segmentation.


2. You Know What Your Database tells you


Customers will tell you all kinds of things if you know where to look for it.

Your customers are always speaking: comments in forums, chats and texts with with you, notes kept in their customer profile, requests through your Customer Relationship Management (CRM software or via email and/or or general communications about buying or selling a home on the various social media platforms out there.

If you take the time to review what your prospects and customers are saying, you can gain insight in what they want and more importantly, how you can deliver it to them effectively.

This type of information is more than insights and sentiment, it’s data that you can use to segment your database based upon how vocal they are (or aren’t).

3. You Know What Prospects and Clients Do

Digital marketing gives you the advantage of not only knowing what the members of your database say, but also what they do DO. There’s a huge difference between a prospect or a client saying they’ll do something versus them specifically taking action like searching online for a home or asking for the specific value of home in which they live.

It’s not just those types of activities you can track either. Today there is data on everything from what people search for on the intent, to the ability to track how customers use your website. And with the increased use of mobile technology in the real estate industry, mobile data is starting to provide useful information to small business owners.

As an important distinction, you can also segment the people in your database on what they didn’t do - on the actions they didn't take.

A physical example of what that looks like is this: in WWII, British engineers added armor to airplanes based on where the bullet holes were not on planes that returned from sorties. Instead of putting them where the holes were. Turns out the planes that were hit in areas that had statistically fewer holes never made it home.

When it comes to your database, a similar approach applies when it comes to what did not happen. Incomplete home evaluation requests, unfinished home searches and people who don’t come back to your website after registering can show you who’s serious and who isn’t.

4. You Know Which Prospects and Clients Are Similar


Having 5,000 names in your database doesn’t mean that all 5,000 are unique in every way. The data you collect on one person can be very similar to the data for another person.

There are two specific methods to identify similarities:

  1. You can find common features to predict specific behaviors like home selling or home buying activities. Prospects who look like existing or past clients can then be given a gentle push in the direction in which you’d like them to go.

  2. Leveraging customer similarities is akin to filtering based on similarity itself. It’s as if the whole segmentation process is starting over over. There are likely different segments of people in your database who are actually still engaged in the same activity as others. You need to make sure that they aren’t segmented and that only those who engage in different activities are.

The good news about segmenting on similarity is that there are economies of scale with respect to time, energy and money spent on marketing to, and caring for, this group of people.

5. You Can Let Technology Make Choices

Increased technological power and higher functionality helps you comb through large volumes of data to create valuable groupings within your database without any human interaction.

Simply by telling your CRM what results you’re looking for and how to sort the data, you can target just about any data set you want.


On the plus side, this will give you fast, reliable results that you can use to target your database any way you’d like. On the down side, machine output is sometimes incredibly complex and not always representative of the true sentiment of the people in the result you gather.

The data is yours and you’ll always have it.


There’s really no bad way to slice up the data, but there are ways you can segment it to get the results you need to effectively target your database.


Take these suggestions into consideration or use your own strategies to target the people in your database to achieve the goals you set for business.

This post was originally published by Market Maker Leads.