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Marketing without segmentation is a lot like shouting into a crowded room and hoping the right person hears you. Without a clear way to communicate in a noisy marketing environment, your message gets lost in the mix.
With segmentation, you can identify your target audience, speak to their needs, and deliver the right message at the right moment. Companies that use segmentation are 130% more likely to understand customer motivations, resulting in more effective campaigns and deeper audience relationships.
In this article, we’ll break down four of the most effective customer segmentation methods, when to use each, and how Experian’s audience solutions can help.
What is segmentation in marketing?
Segmentation is the process of splitting a large audience into smaller groups that share similar traits, like demographics, location, behavior, or firmographic characteristics. As a marketer, these segments enable you to choose channels, messaging, and offers that resonate with each group.
Whether you’re targeting new homeowners in Texas, loyalty shoppers in retail, or small business decision-makers in finance, segmentation helps you stand out to them and get results.
Why should marketers segment their audiences?
Effective audience segmentation fuels accuracy, performance, and personalization at scale. Here’s why you should invest your time and marketing budget in honing your audience segments.
Maximize your marketing ROI
Nobody wants to waste money talking to the wrong crowd. Using various methods of segmentation, you can focus on those who want to hear from you — and the payoff can be huge. For marketing channels like email, segmentation can drive up to 760% more revenue than non-segmented campaigns. The more targeted your message, the better the return.
Create a unified omnichannel strategy
Segmentation helps ensure that every channel, from email and social media to display, SMS, and direct mail, operates from the same playbook.
Once you define your target audience segments, you also need a trusted identity partner to sync them across platforms and environments. This ensures you can deliver consistent, personalized experiences at every touchpoint and your audience receives the same message in the proper context, regardless of where they engage.
Strengthen customer loyalty
Roughly 75% of consumers are loyal to brands that “get” them. When you strive to understand your customers, they’re more likely to stay. Segmentation enables you to personalize communications based on your target segment’s values, behaviors, or preferences, encouraging repeat business.
Expand into new markets
With segmentation, you can analyze existing customers to identify common traits and use that data to pinpoint similar groups in new regions or markets. For example, if your top customers are middle-class parents in suburban areas, you can target lookalike segments in other cities with tailored messaging.
This makes it easier to expand with confidence, knowing you’re reaching people who are more likely to convert.
Lower customer acquisition costs
Rather than forcing you to cast a wide net, segmentation enables you to focus your budget on high-potential audiences across channels, reduce acquisition costs, and minimize wasted spend on low-intent audiences.
Four segmentation methods and examples
Let’s look at four different methods of market segmentation. We’ll define each, share when to use them, and give real-world examples to help you apply them.
1. Demographic segmentation
Demographic segmentation breaks your audience into groups based on gender, income, age, education, marital status, occupation, and household size. It’s one of the most foundational segmentation methods because it’s easy to implement and often tied directly to buying behavior.
Demographic data makes it easier to get the tone, offer, and channel right from the start. And when you combine demographic segmentation with other segmentation methods, such as behavior or location, the impact multiplies.
When to use it
Use demographic segmentation when your product or service is clearly more relevant to people in a specific life stage, income bracket, or household type.
Among all methods of market segmentation, demographic data is often the easiest starting point. It’s especially effective for industries such as financial services, healthcare, education, retail, and others, where consumer needs change based on demographics.
Examples
As a real-world example, a health supplement company used Experian data to segment its ambassador program audience into four demographic groups based on lifestyle and household makeup. These included younger singles, value-seeking families, high-income spenders, and older empty nesters.
Applying these insights at registration allowed the brand to deliver personalized, channel-specific communications that boosted acquisition and retention. The approach led to stronger engagement and more meaningful customer connections.
2. Geographic segmentation
This method of market segmentation categorizes people by location, including country, region, state, city, zip code, or even climate. It’s a simple yet effective way to tailor your marketing, as location often influences everything from lifestyle and language to shopping habits and product needs. It’s most often used among brands with physical locations or region-specific campaigns.
Whether you’re promoting snow boots in Colorado or sunscreen in California, geographic segmentation helps you stay relevant to the local context.
When to use it
Geographic segmentation is ideal when your offer or message changes depending on climate, culture, availability, or local regulations. It’s also helpful for planning market expansion or testing the performance of different methods of market segmentation across regions.
Examples
One home furnishings retailer partnered with Experian to understand how customer needs varied across store locations. Using a mix of client data and Experian demographics, we segmented stores based on their surrounding customer base, like urban, white-collar shoppers in metro centers versus lower-income households in more remote cities.
These insights enabled the retailer to tailor inventory, marketing strategies, and ad copy for each store type, resulting in more relevant customer experiences.
3. Behavioral segmentation
Behavioral segmentation centers on how people live their lives — their interests, habits, and decision-making patterns. It includes factors like past purchases, engagement frequency, brand loyalty, product usage, browsing patterns, and responsiveness to offers or promotions.
Among all of the segmentation methods, this one provides insight into intent, helping you go beyond who your audience is to understand what they do. You can use behavioral insights to re-engage former customers with relevant offers, reward loyal buyers with personalized perks, or guide high-intent shoppers toward conversion with timely nudges.
When to use it
Behavioral segmentation is best when you want to personalize based on intent, habits, or engagement stage. It’s particularly useful for retention, reactivation, or cross-selling strategies.
Examples
In practice, a national big-box retailer partnered with Experian to better understand customer behavior during grocery store visits. The goal was to identify distinct “trip missions” that could drive category trial and increase basket size. We analyzed everything from basket contents to customer composition and segmented visits into 11 unique missions.
For example, the “All Aisles Online” segment represented large households (often homeowners with families) stocking up on household staples through online orders. In contrast, the “Marketable Mission” segment captured smaller, likely renter households making quick trips for non-essentials.
These behavioral insights empowered the retailer to adjust promotions based on the intent behind each visit, strengthen customer relationships, and drive growth.
4. Firmographic segmentation (B2B)
Firmographic segmentation is like demographic segmentation for businesses. It groups B2B audiences based on attributes such as annual revenue, location, company size, industry, and organizational structure. You can also segment by job title or decision-maker role to better target key stakeholders.
This method is great for aligning your messaging, sales strategy, or product offerings with the unique needs of various business types. A startup in the tech sector will likely respond to a very different pitch than an enterprise manufacturer, and firmographic data helps you speak to both with precision.
When to use it
Use firmographic segmentation when marketing to other businesses, especially when your product or service has different benefits depending on business size or sector.
Examples
Recently, a B2B client partnered with Experian to gain a deeper understanding of the revenue potential of their existing business customers. Using firmographic data, we segmented the client’s customers into distinct groups based on the characteristics most strongly tied to spending behavior.
For each segment, we calculated potential spend, defined as the 80th percentile of annual spend within that segment. This allowed the client to identify high-value accounts with untapped growth potential.
For example, one customer, ABC Construction, had spent $4,750. But based on their segment’s profile, their annual potential was $9,000. That insight revealed a $4,250 opportunity to deepen the relationship through more targeted marketing and sales efforts.
Best practices for market segmentation
Regardless of the segmentation method you use, the following best practices will help you maximize the benefits of your efforts.
Start with clean, reliable data
Segments are only as good as the data behind them. If your data is outdated, inaccurate, or incomplete, your segments will result in ineffective targeting and a wasted budget. Utilize accurate, compliant, up-to-date sources like Experian Marketing Data, ranked #1 in accuracy by Truthset, to ensure your targeting is on point.
Test and refine segments continuously
Business goals, market conditions, and behaviors are constantly changing. What worked last month or even last week might not work today. By adjusting your segments over time, you make sure your marketing stays relevant, focused, and effective. Use A/B testing, performance metrics, and audience analytics to iterate on your segments and improve results over time.
Align segments with personalized messaging and offers
Each segment has distinct needs, preferences, and motivations, which means generic messaging won’t resonate effectively. Once you’ve built your segments, personalize your creative, copy, and offers to appeal to each group and increase the likelihood of engagement and conversions.
Integrate segmentation across all platforms
If someone sees one message in an email and a completely different one in an ad or on your website, it creates confusion and weakens trust. From CRMs and email platforms to ad tech and analytics tools, make sure your segmentation method is applied consistently across every channel to improve performance and build a cohesive brand experience.
Segment your audiences with Experian
Effective audience segmentation is at the heart of every successful marketing strategy, but in this fragmented, privacy-conscious landscape, grouping your audience into meaningful, actionable subgroups is more challenging than ever. That’s where we come in.
With coverage of the entire U.S. population, Experian helps marketers define and categorize broad audiences into precise segments using rich data on demographics, behaviors, financial profiles, and lifestyle traits. These insights make it easier to personalize messaging, optimize media spend, and drive better outcomes.
From ready-to-use syndicated audiences to custom segments and even Contextually-Indexed Audiences that align targeting with content, Experian offers flexible segmentation solutions that perform across digital, TV, programmatic, and social channels.
In our most recent release, we introduced over 750 new and updated audience segments across key categories, including a brand-new category for Experian, giving marketers more accurate, behavior-based targeting options than ever before.
- 135+ new CPG audiences, a brand-new category for Experian, built from opt-in loyalty card and receipt scan data
- 240+ new automotive audiences covering ownership and in-market shoppers
- 100+ new high-spending behavior audiences focused on specific merchant categories
- 24 new wealth and income segments with refined household net worth tiers
- 13 new lifestyle-based housing audiences for family- and household-focused targeting
- 250+ refreshed financial segments with improved naming conventions for better discoverability and clarity
Together, these segments give marketers more accuracy to reach high-intent consumers based on real-world behaviors, spending patterns, and financial capacity.
Audience solutions powered by consumer insights
Experian Marketing Data, one of the most comprehensive and accurate consumer databases in the U.S., is the core of our segmentation capabilities. Backed by over 5,000 demographic and behavioral attributes, it helps you understand not just who your customers are but how they live, shop, spend, and engage, too.
Each audience segment is built with privacy and precision in mind, using a blend of demographic data, financial behaviors, lifestyle signals, and media habits. With these consumer insights, we’ll help you uncover meaningful patterns that lead to smarter strategy.
Experian’s pre-built audiences
Our syndicated audiences are pre-built, ready-to-activate segments based on shared characteristics from age and income to purchase behavior and lifestyle indicators. When speed and scale are a priority, these segments offer a fast, effective way to reach your target audience.
Experian’s 2,400+ syndicated audiences are available directly on over 30 leading television, social, and programmatic advertising platforms, as well as within Audigent for activation within private marketplaces (PMPs).
Here’s what’s new from our August 2025 release:
- CPG shoppers by category (e.g., Frozen Food Shoppers, Multi-Vitamin Shoppers)
- Luxury EV owners and auto brand shoppers (e.g., Rivian, Polestar, Cadillac)
- High spenders in specific categories (e.g., men’s grooming and women’s accessories)
- Ultra high-net-worth households (e.g., Net Worth $50M+) and likely home sellers
- Young Family Homeowners and Growing Family Apartment Renters
Custom audiences for specialized targeting
Need a custom audience? Reach out to our audience team, and we can help you build and activate an Experian audience on your preferred platform. Additionally, work with Experian’s network of data providers to build audiences and send to an Audigent PMP for activation.
Contextually-Indexed Audiences
Experian’s Contextually-Indexed Audiences offer a privacy-safe way to reach relevant consumers in the moments that matter without relying on identity signals or third-party cookies. These segments combine Experian’s consumer insights with page-level content signals, enabling you to align targeting with intent and mindset, even in cookieless or ID-constrained environments.
Want to take your segmentation strategy to the next level? Let’s talk. We’ll help you define your audience in ways that drive real results.
Talk to our team about your segmentation methods today
Latest posts
Over the last few months, Experian has released new syndicated audiences to most major platforms supporting retail and travel. In this blog post, we’ll highlight some of these new audiences and how they can be used with other data from Experian to build the perfect audience to reach your customers and prospects. What separates Experian's syndicated audiences Experian’s 2,400+ syndicated audiences are available directly on over 30 leading television, social, programmatic advertising platforms, and directly within Audigent for activation within private marketplaces (PMPs). Reach consumers based on who they are, where they live, and their household makeup. Experian ranked #1 in accuracy by Truthset for key demographic attributes. Access to unique audiences through Experian’s Partner Audiences available on Experian’s data marketplace, within Audigent for activation in PMPs and directly on platforms like DirectTV, Dish, Magnite, OpenAP, and The Trade Desk. Household Expenditure audiences We’ve created new predictive audiences to help retailers reach consumers across 35 categories likely to spend within that category. A few categories include Apparel, DIY, Health, and more. With the launch of these new audiences, we will retire our existing Household Consumer Expenditure, Online and Retail category audiences in the November Digital Master update. Who these audiences are for Our Household Expenditure audiences use data from multiple sources, providing brands with highly accurate purchase predictions and data that scales for digital execution. Household Expenditure audiences are an excellent solution for brands with new product lines or where targeting based on historical purchases lack signal brands seek. Building data from multiple data sources helps ensure high performance and accuracy and can illuminate trends in consumer shopping patterns. These trends can be used to help predict future shopping behaviors. How to refine our Household Expenditure audiences To refine your audience, you can combine this data with Experian’s demographic and household expenditure audiences to ensure you are reaching consumers. For example, suppose you’re an apparel brand launching a new line aimed toward women over the age of 40. In that case, you can use Experian’s demographic data to reach those women and layer in our household expenditure purchase predictor segment for women's apparel to reach their new target audience. Mobile Location audiences We’ve expanded our location database to include more locations and points of interest. With this new data, we could strengthen our existing mobile location audiences to broaden the reach, improve accuracy, and increase performance. We’ve created 11 new mobile location audiences with our new dataset that supports the retail and travel verticals. These new audiences include new shopping behaviors, including high-income and high-end shoppers and travel and entertainment behaviors, including visiting sporting arenas like MLB, NBA, NFL, and university stadiums. Who these audiences are for These audiences are for brands that want to reach consumers based on their location behaviors. Often valid for retail, travel, and entertainment brands, Mobile Location audiences provide brands with highly accurate data that shows previous intent and interest in critical locations. How to refine our Mobile Location audiences To refine your audience, you can combine your Mobile Location audience with Lifestyle and Interest data. For example, if you are creating an advertising campaign for a hotel near a university stadium for the largest game in the season, you could combine university stadium visitors with sports enthusiasts and in-market for travel to find consumers most likely to be interested in your campaign and staying at the hotel. Purchase-Based Transaction audiences For use cases where predictive audiences aren’t the best fit to reach the right consumer, such as targeting consumer’s historical purchases, we’ve created new purchase-based transaction audiences that utilize opt-in consumer transaction data across 29 retail categories, including apparel, home, lifestyle, health, food and beverage, and more. Who these audiences are for These audiences are a perfect fit for brands trying to reach consumers based on previous purchases. These audiences can be broken out by their spending patterns – frequency of purchase and high spenders – and their response to advertising, including direct mail, email, inserts, and digital. How to refine our Purchase-Based Transaction audiences Combine these new audiences with Mosaic to fine-tune your audience based on their purchasing and lifestyle patterns. Suppose you are a brand with a new line of home décor products launching and will utilize influencers to endorse your product line. In that case, you can use Experian’s purchase-based transaction audiences for high spenders in home décor and layer our Mosaic audience Influenced by Influencers to find consumers who are most likely to purchase and trust an influencer. We can help you discover and activate your perfect audience Our audiences are available in most major data and execution platforms. Visit our partner page for more information. Don’t see our audiences on your platform of choice? We can help you build and activate an Experian audience on the platform of your choice. Contact us Latest posts
The AdTech industry is buzzing with discussions about cookie deprecation and effective strategies to tackle it. One of the commonly suggested solutions is the utilization of clean rooms alongside responsibly sourced first-party data. Above all else, the industry recognizes the importance of respecting consumer data and complying with all privacy laws. Additionally, the industry acknowledges the need for a change in our historical practices. This shift benefits everyone involved, as consumer data is more secure than ever. Tremendous investments have been made to ensure the utmost security of consumer information. Clean rooms are one of the tools that enable companies to use data securely, ensuring the content that you see is as relevant as possible. Two ways the AdTech industry is addressing cookie deprecation The days of sending data directly to partners for usage or for using only third-party data for marketing efforts are gone. Now, the emphasis is on responsibly collecting first-party data and using clean rooms to enrich first-party data to enhance marketing efforts. First-party data The industry is starting to lean into first-party data gained through transparent means. This valuable information provides organizations with deeper insights into their customers, allowing for more personalized and effective interactions. By embracing the power of first-party data, either on its own or enriched via partner collaboration, you can cultivate stronger relationships, build trust, and deliver tailored experiences that resonate with your customers on a deeper level. Clean rooms Many data lakes and warehouses offer this service, ensuring their clients can not only store their data with them but can connect it with other partners in a secure environment and extract more information through the combined data sets versus their data on its own. Brands and their partners recognize that they need to work together, and a clean room provides a secure environment to share their first-party data without exposing their sensitive data to their partner. So, while we're losing third-party cookies, brands and partners can still get value from first-party data by using a clean room to generate audience insights, segmentation strategies, personalized experiences and offers, media plans, and measurement and attribution. Three ways data clean rooms can improve Data clean rooms are a great way to facilitate data collaboration while ensuring sensitive data is not exposed. Data clean rooms are not yet easy to use nor are they inexpensive. They require investment, both financially and resource allocation-wise, and you are not guaranteed to yield great match results. Let’s dive into three areas for data clean room improvement. High cost According to the IAB's State of Data 2023, nearly two-thirds of data clean room users spent at least $200K on the technology in 2022. In addition, one-third of data clean room users expect the price of data clean rooms to rise in 2023. The high cost of this solution can make it inaccessible to smaller companies in the advertising space. Resource intensive Nearly half of the companies using data clean rooms have a team of six or more dedicated to the technology, according to the IAB’s State of Data 2023, while nearly a third of companies using data clean rooms have 11 or more employees focused on the technology. Data clean rooms are not turnkey solutions. Inefficient matching Even if companies are using clean rooms does not mean that they are automatically going to achieve great success. Identity fragmentation, data hygiene, and differing identifiers can suppress client match rates in clean rooms, leading to significant investment and a lackluster output. How to get the most return on your clean room investment The finish line for data collaboration in clean rooms is not just having a relationship with a clean room. Instead, you should incorporate an identity resolution solution in your clean room. By adding an identity solution to your clean room, you can: Resolve and match all your identity data, regardless of the identity data that you or your partner have, giving you a larger data foundation to analyze. Generate more valuable insights and information, leading to a better experience for your customers. Join data sets to create smarter activation and targeting strategies and produce more holistic measurement. Experian can help you get started with identity resolution and data clean rooms If you are investing in data clean rooms, that means you are committed to the best in data practices. Experian recommends going the extra step and that you also invest in finding an identity resolution solution. By doing this, you can see better match rates. Experian offers this capability and has existing relationships with three clean room partners, Amazon Web Services, InfoSum, and Snowflake. In addition to collaborating in clean rooms, we offer collaboration in two other secure environments. Contact us today to discuss how we enable identity resolution in clean rooms or to chat about our other collaboration capabilities. Get in touch Latest posts
Ongoing signal loss is driving marketers, agencies, and platforms to turn to supply-side advertising. By using first-party data from publishers and platforms, supply-side advertising has the potential to deliver high-quality audience and context for more effective ad targeting. The supply-side refers to the publishers and platforms that sell advertising inventory. These companies have access to first-party data about their users, which can be used to target ads more effectively. By tapping into supply-side advertising, you can overcome the challenges of signal loss and target ads more effectively. To shed light on this topic, we hosted a panel discussion at Cannes, featuring industry leaders from Audigent, Captify, Newsweek, Pubmatic, Truthset, and Experian. In this blog post, we'll explore how partnerships between supply-side channels and publishers are working to enhance advertising opportunities while balancing the need for transparency and control in programmatic ad buying. Shift toward supply-side advertising Traditionally, the demand-side dominated the programmatic media buying chain due to an abundance of supply. However, with the emergence of finite data and its interpretation, collaboration between supply-side technology companies and publishers is required to redefine these economics. It's no longer sufficient for the demand-side to blindly negotiate prices based on limited knowledge. Marketers can still define their target audience, but effective communication is key. This presents an opportunity for premium journalistic outlets to guide the industry's understanding of how data from the supply-side impacts media buying economics in the future. "Supply-side technology partnerships with publishers are now in a position to shape the economics of programmatic media buying as there is a finite amount of data. It’s crucial for supply-side technology companies to collaborate with publishers to shape these new economics. This presents an opportunity for premium journalistic outlets to provide guidance on how data from the supply-side can affect the future of media buying." matthew papa, svp, business & corporate development, captify Democratizing data from the supply-side Cookies haven't brought significant benefits to premium publishers. They mainly serve to retarget users from sites like The Wall Street Journal to advertising sites. This approach primarily serves the purpose of generating revenue. The elimination of third-party cookies presents an opportunity for premium publishers to shift this dynamic. By using their knowledge of first-party audiences, and using identifiers like Experian's LUID, publishers can own and understand their audience data, which can then be modeled. Here’s how publishers can win Establishing a connection with consumers and emphasizing the value exchange is essential to building trust. Determining what incentives and benefits consumers find meaningful will be crucial in gaining their opt-in. With consumers The Apple tracking transparency initiative, specifically the deprecation of IDFA signals, had significant implications for mobile app developers. Overnight, opt-in rates plummeted, causing a drastic decline in iOS ad monetization. To combat this, developers focused on demonstrating the value exchange to consumers—better ad experiences and personalized content. By articulating the benefits over a couple of years, opt-in rates increased from 10-15% to 30-40%. The key takeaway is the need to effectively communicate the value exchange to consumers. With partners Trust plays a crucial role in planning your first-party data strategy. Publishers, advertisers, and data partners highly value their proprietary data. However, there are concerns about how it's used, mishandled, or leaked in the ecosystem. Building trust between partners is essential. It's important to work with trustworthy partners who are agnostic, committed to innovative solutions, and globally oriented. These partners can help navigate the complexities of laws and regulations. Choosing the right partners is crucial in a world where first-party data is a key asset. "Power is shifting toward brands that have strong relationships with customers and possess first-party data. As the ownership of customer data becomes more important, it is crucial to establish a first-party data strategy to better serve customers and adapt to changing market dynamics."chip russo, president, truthset Balance probabilistic and deterministic data Focus on building trust with consumers and collaborating with reliable companies to share data. However, it's important to remember that achieving a 100% opt-in rate is unlikely. The cookie, which has become omnipresent, requires us to shift our strategic thinking. We need to consider both deterministic and probabilistic approaches instead of viewing them as mutually exclusive. The landscape will be fragmented, with some consumers opting in and others not. "Probabilistic and predictive audience data holds immense potential. With the power of AI, we can expect enhanced performance and efficacy in media campaigns. At Audigent, we firmly believe that this data will outperform deterministic data, making it an integral part of our strategy." drew stein, ceo, audigent Premium content Trust plays a crucial role in leading to premium content. By placing trust in the best media brands, data, and technology partners, we can expect to see improvements in media, journalism, and advertising. This shift may have a direct impact on the long tail of free natural resources, making it more challenging for them to thrive. However, this change is ultimately beneficial since it promotes higher-quality media experiences overall. "The homepage surface is making a comeback in the publishing industry, proving its value in establishing a direct connection with readers. While we acknowledge the importance of technology partnerships for addressability and identity, our core competency as a publisher remains outstanding journalism that captures and engages great audiences." kevin gentzel, cco, newsweek Watch our Cannes panel for more on supply-side advertising We hosted a panel in Cannes that covered supply-side advertising. Check out the full recording below to hear what leaders from Audigent, Captify, Newsweek, Pubmatic, Truthset, and Experian had to say. Watch now Check out more Cannes content: Our key takeaways from Cannes Lions 2023 Insights from a first-time attendee Four new marketing strategies for 2023 Exploring the opportunities in streaming TV advertising The future of identity in cookieless advertising Follow us on LinkedIn or sign up for our email newsletter for more informative content on the latest industry insights and data-driven marketing. Contact us today Latest posts