Glossary
Customer Segmentation
Dividing the customer base into groups that share meaningful behaviors, needs, or economics.
Customer segmentation splits a market or customer base into groups that behave similarly — by firmographics (industry, size, geography), technographics (tools they use), behavior (usage patterns), needs (jobs to be done), or economics (LTV, churn risk). The goal is to find segments where the product-market fit, willingness to pay, and go-to-market motion are genuinely different, then tailor your approach.
Good segmentation changes decisions: pricing tiers, packaging, sales motions, onboarding flows, and feature roadmap all flex by segment. Bad segmentation produces colorful slides that never change anything operationally. A useful test is whether the segmentation is actionable — if the answer to "what would we do differently for this segment?" is "nothing," the split is cosmetic.
Why it matters
Treating all customers the same is an expensive mistake. Segmentation concentrates resources where they compound instead of spreading them thin.
Related terms
Buyer Persona
A fictional but evidence-based profile of a target buyer, used to align product, marketing, and sales.
Market Positioning
The place a product occupies in the mind of its target customer relative to alternatives.
Jobs to be Done
A theory that customers "hire" products to make progress on a specific job, not because of demographics or features.
TAM, SAM, SOM
Three nested sizing measures: Total Addressable Market, Serviceable Addressable Market, and Serviceable Obtainable Market.
Product-Market Fit
The point at which a product clearly serves a real market need, demonstrated by strong demand, retention, and organic growth.