When geographic metrics are used

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Imagine that you are a large bank and you have several hundred thousand clients. And you decide to conduct an SMS campaign and send a series of messages to ALL clients. Of course, with this approach the message will reach the target group of clients, but at the same time the majority will simply "go down the drain" or even cause a negative reaction due to intrusive advertising.

This is where market/consumer segmentation and clustering algorithms come in handy. Market segmentation is the process of dividing actual or potential consumers in a market into different groups (or segments) within which consumers have similar or identical needs that are satisfied by a given marketing mix. A market segment is a group of actual or potential consumers who are expected to respond similarly to a given marketing mix.

Segmentation of our banking clients could help to filter out the majority of passive consumers who react very weakly to advertising impact, to find active ones and those who want and can try new products, who have needs for it. By influencing this narrower target audience, we could more personally compose a targeted message and at the same time significantly reduce the budget for SMS mailing.

Segmentation algorithms can be used to solve both individual finland cell phone number list/ problems. For example, as in the example of determining customer segments by the activity of reaction to advertising messages. And for more global ones. For example, for segmenting the entire company market by key metrics.

Segmentation can be done using a variety of metrics and criteria, but the main thing is that the resulting segmentation solves the initially set tasks and increases the effectiveness of the company's marketing.

So the most popular segmentation criteria are:

Geographic segmentation: as a basis (for example, different regions or cities)
Demographic segmentation. Dividing consumers into groups by gender, age, marital status, nationality. For many products and markets. This type of segmentation is very important, because based on these simple indicators, it is possible to obtain fairly well-grouped segments.
Psychographic segmentation . The market is divided depending on the lifestyle, personal qualities of clients, social classes;
Behavioral segmentation. When consumers are divided into groups based on various aspects of consumer behavior (frequency of purchases, places of purchases, level of brand loyalty, etc.).
In marketing research, various methods of multidimensional segmentation are often used. The most popular are the methods of hierarchical and non-hierarchical cluster analysis. Let's consider this excellent method of segmentation using an interesting case from our practice as an example.