A: There are different ways. A lot of times, companies use DMPs (data management platforms) or CRMs (customer relationship management) tools to collect customer data. They use their own first-party data or leverage other sources to be able to segment customers into certain attributes they want to target.
So, a company takes specific pieces of data about customers, establishes goals as far as what types of customers they want to reach, and uses that information to be able to act via personalization tools like recommendation engines, search engines, or marketing and ad targeting.
Really, the only way to be able to understand how your customer segmentation is working is to have some type of analytics tool to evaluate performance and understand who you're reaching and if it's the right target market.
For example, say you know there's a group of females in a certain age range that come to your site and you want to do a promotion to them for a sale. You know that somebody comes back on a daily basis on your site and purchases versus someone else, who comes back on a monthly basis and purchases. But you want to get those monthly visitors so they are coming back and making purchases more often. You may be more likely to promote to just that segment of users that are monthly visitors. So that's where the joint data come together.
This type of customer segmentation requires pairing two types of data: data about the visit and data about the visitor.
Visit characteristics related to the person's engagement with the brand or service. For example, when did they visit the site, what did they look at, did they make a purchase, how long were they there?
Visitor characteristics related to everything about the customer's demographics and lifestyle, such as who they are and what they do.