Market segmentation brings several advantages to companies:
Improved product development: By understanding specific customer needs, companies can create products that better meet those needs.
More effective marketing: Targeted marketing messages better resonate with specific groups, thereby increasing conversion rates.
Improve customer loyalty: By catering to the unique needs of different groups, businesses can build stronger relationships with their customers.
Increased profitability: Tailored marketing campaigns make more efficient use of resources and deliver a higher return on investment.
Market segmentation is a powerful tool that allows companies to better understand their customers and develop more targeted marketing strategies. By dividing the market into different groups, companies can tailor products, services, and marketing activities to the specific needs of each group, ultimately improving customer satisfaction and business performance.
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What is a Key Performance Indicator (KPI)?
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2 min read
Common marketing terms
In the business world, measuring success is critical to growth and improvement. One of the most effective ways to evaluate performance is through Key Performance Indicators, often referred to as KPIs. These quantifiable metrics help organizations track progress against specific goals and objectives, providing valuable insights for decision-making and strategy development.
What is a Key Performance Indicator (KPI)?
Key performance indicators are measurable values that demonstrate how effectively a company is achieving key business objectives. They act like a compass, guiding the organization toward its strategic goals by providing clear, actionable performance data on all aspects.
KPIs differ from general indicators in that they specifically represent performance against strategic objectives. While metrics track tactical processes or actions, KPIs focus on broader business outcomes, such as target quarterly revenue or new customer acquisition rates.
Extended reading: What is conversion rate (CVR) & customer economic value (EVC) ?
Characteristics of Effective Key Performance Indicators (KPIs)
To be truly effective, KPIs should follow the SMART framework:
Specific: KPIs should have clear, well-defined focus areas.
Measurable: Progress should be quantifiable using objective data.
Attainable: Goals should be realistically achievable.
Relevant: KPIs should be directly related to the organization’s goals.
Time-bound: There should be a specific time frame for achieving the goal.
Importance of Key Performance Indicators (KPIs) in Business
Implementing KPIs brings many benefits to organizations.