What are Customer Groups (With Definition & Types)

As a business, you have customers coming from a wide range of backgrounds. These customers could be individuals purchasing for private use, wholesalers or retailers buying in bulk or professionals. Each of these groups requires a different approach when it comes to the purchase of your products or solutions, so you have to adjust your marketing, sales and customer care accordingly. Enter customer grouping.

Customer grouping helps a company optimize its efforts by tailoring its strategies to each group. Your pricing or marketing efforts will differ depending on whether it’s individuals or large enterprises you’re targeting. Instead of a one-size-fits-all approach, you customize according to the customer group, maximizing success with that segment.

In this article, we’ll cover what customer groups are, the different types, how to create them and how to leverage them to your benefit.

What Are Customer Groups?

It means putting your customers into common clusters based on characteristics they have in common. The particular groupings you use depend on your clientele and your need to separate them.

For example, imagine you want to enlarge your market share with Gen Z. To achieve this, you’ll divide your clients based on their age or birth year.

Customer groups can be based on any characteristics, from the size of the company (small business vs. large enterprise) to purchase habits to demographics to region.

Types of Customer Groups

There are a huge number of groups you can put your customers into based on several factors such as consumer behaviour, age, or region. However, there are more general categories you can categorize them under to better understand them.

Customers are often grouped into the following broad categories based on purchasing habits

Loyalty Customers

Loyal customers are generally those who have made 5+ purchases from the same brand. Though they may make a small percentage of your overall clientele, they make a big contribution. Repeat customers contribute to 65% of a company’s revenue.

These customers will support your company for life, so long as you maintain product quality and sustainable pricing. They’ll also be the first ones to test freshly launched products or services. Hence, it’s important to keep their needs in mind and dedicate some resources to customer loyalty and retention — not just chasing after new customers.

Impulse Buyers

Impulse buyers skim your products and services without having any particular goal in mind. These buyers represent a great opportunity to woo over to your brand as they tend to be large spenders. They’re also a great opportunity to experiment your new products and services on.

Bargain Hunters

These customers are constantly on the prowl for the best deals and savings. You’ll see an uptick in bargain hunters during your sales seasons. Bargain hunters are hard to turn into regular customers as their loyalty lies in the best offer for the price. Nonetheless, these customers are useful in honing your marketing skills by seeing what works best to lure in reluctant customers.

Wandering Buyers

Wandering buyers are similar to impulse buyers in that they have no particular purchasing goal, but what differentiates them is that these types of customers have no intention to buy. They are also called browsers because they browse your products and services without making a purchase. Wandering buyers make up a large part of traffic but a minuscule part of company revenue. They are hard to entice.

If you’re curious about the psychology of consumer buying behavior and want to read more about it, this guide will come in handy.

Need-based Customers

This type is probably the closest to the “classic customer”. Needs-based customers have a need to fulfil or a problem to solve and are searching for a solution to fix it.

They may have done a lot of research beforehand or may be exposed to your product for the first time. If they’re already knowledgeable about your product, then your sales team should emphasize the value of the investment, and you should offer quality care.

If they’re satisfied with the product/service and customer care, then these customers can be converted into loyal customers. Thus, it’s important to cater to these customers.

Your team needs to be fast in cinching the deal as these customers can easily be lost to the competition.

93% of Growing Businesses Use Customer Groups.

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Ways to Create Customer Groups

If you’re a newbie and confused about where you should start, then the following customer segmentation models can help in figuring out the different criteria one can base a customer group on.

Demographic Characteristics

Demographic segmentation is based on the characteristics of a population, such as age, sex, income level, marital status, ethnicity, etc.

If you have a diverse customer base, then dividing them into demographic-related groups can help in optimizing marketing campaigns.

Behavioural Characteristics

Consumers are grouped based on their purchasing behaviour and habits. For example, their favourite soft drink or their purchasing history with your brand.

The categories of loyal customers, impulse buyers, wandering buyers, etc. fit under this type of segmentation. Knowing where in the sales funnel your customers are helps your sales and marketing divisions tailor their tactics to each stage, improving conversion rates and customer retention.

Further Reading: 50 Consumer Behavior Survey Questions (Free Template + Examples)

Psychographic Characteristics

Under this category, consumers are grouped together based on psychological characteristics like habits, beliefs, interests, etc.

It taps into the personal aspects of customers in order to attract them to your brand. Lifestyle brands tend to use this segmentation as they’re looking for customers who share similar values. For example, a high-fibre granola brand will want to target health-conscious customers.

Geographic Characteristics

This type of segmentation organizes customers based on the region, country or city they live in. Geographic segmentation is useful to locale-based industries like real estate or for companies whose products are targeted to those living in a particular climate. For example, a winter-wear company wants to focus on customers from regions with cold winters.

Technographic Characteristics

This is a relatively newer category that has come up with the technological revolution. Customer subgroups are created based on the technology they use.

For example, imagine you develop a photoshopping software. Using this segmentation, you can target users of other software who may not be satisfied with what they’re using.

Firmographic Characteristics

Firmographic segmentation divides customers based on the generation or era they were born in, such as Gen Z, Boomers or Millenials.

Each generation was influenced by different cultural events and milestones, and they often have their own aesthetics or lingo which sprang up as a result.

Taking each generation’s needs and preferences into account helps your marketing team have an edge, diversifying your customer base, and can act as an idea generator for new products.

For example, a healthcare company having a large portion of boomer clients might want to highlight their geriatric health products.

Needs-Based Characteristics

This groups customers together based on the customer’s need for a certain product or service. Without meandering, your team has precise customer targets in mind, who your product or service aims to reach. A lighting company can focus on photographers, a hair oil company on women with hair loss, etc.

Value-Based Characteristics

This segmentation model brings together the customers who provide the most value to your business. They bring in the most profits. The group or groups who make up the highest percentage of your repeat customers.

Focusing a portion of your marketing efforts on value customers builds and maintains their loyalty. The implementation of reward systems like point-based loyalty programs acts as a motive which can convert new customers into repeat customers and build customer retention.

When creating these groups, it’s crucial to have accurate and up-to-date information. This is where tools like SurveySparrow come in handy. By creating targeted surveys, you can gather precise data about your customers’ preferences, behaviours, and needs.

How to Utilize Customer Groups

Customer grouping allows you to gain a holistic understanding of the behaviour and habits of each consumer group. Understanding the minute details of your customers, from the needs they have to the channels they use, empowers you to make the best decisions to maintain your company’s success.

This minute data also helps to set pricing strategies. For example, you can offer larger discounts to wholesale buyers to repeat orders as they’re buying in bulk. You can offer discounts to wandering buyers who keep products in their checkout to entice them to make the purchase. Such decisions catering to specific buyers can be made because of the collection of granular data.

Customer segmenting helps to refine your marketing campaigns. Creative testing can be done on each segment to elucidate their preferences, and ads can be then tailored to the creatives and channels that speak best to each segment. You also gain an understanding of what to market.

It can even be used to create ideas for future products or services, as you have a pulse on what your customers need and desire.

Making Customer Grouping Easy with SurveySparrow

Let’s face it – understanding your customers can be tough. You want to group them effectively, but how do you get the information you need without hassle? That’s where SurveySparrow comes in.

Here’s what SurveySparrow can do for you:

Create fun, engaging surveys that get you the info you need about your customers.
Show you results in real-time, so you can start grouping customers right away.
Work seamlessly with your other business tools, saving you time and headaches.

With SurveySparrow, you’re not just throwing darts in the dark. You’re getting real insights about your customers, helping you group them in ways that make sense for your business.

93% of Growing Businesses Use Customer Groups.

Don't Fall Behind - Try SurveySparrow Now!

14-Day-Free Trial • Cancel Anytime • No Credit Card Required • Need a Demo?

What are Customer Groups