Customer Micro Segmentation

What is Micro Segmentation

Most of organizations use traditional marketing segmentation. Traditional market segmentation is usually used to identify their target customer groups. Accordingly, they can focus their marketing activities on proper customer groups for acquiring or cross-selling. Traditional segments are a very general slice of customers. Usually traditional marketing segmentation focuses on rule-based techniques:

  • Demographics: using common attributes like age, gender, income, job,
  • Behavioral data: by spending amount, purchase patterns,
  • Psychographics: by lifestyle, preferences, 
  • Geolocation: by location, country, region, or city.
A micro-segmentation works on refining traditional market segments using machine learning and AI algorithms. At Smartera, we utilize machine learning clustering algorithms for detecting customer clusters.
customer segmentation

What We Do

We implement several clustering and micro-segmentation techniques. We cover micro segmentation for several industry domains like banking, telecom, and retail.

We can start from traditional segment and refine it further to lower granularity using machine learning clustering to get much smaller segments. Below diagram depicts an example for banking mass segment to illustrate the idea.

We follow a scientific process during machine learning modeling that starts with:

  • Business understanding of requirements,
  • Data understanding identifying data sources,
  • Define requried attributes of the model,
  • Data preapration,
  • Modeling process for selecting a clustering algorithm that matches the use case of the customer,
  • Evaluation of model results,
  • Iterate above process till getting satisfactory results,
  • Deploy the model to action.

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