By CommenceCRM

The Difference Between Customer Segments and Customer Archetypes

Small colorful figures segmented in groups by color

One major challenge marketing and sales teams face is how to organize the information they collect from consumers or end-users. As they review existing customer research, they may be overwhelmed by the research and design methods available. Should they segment their data? Do they create customer personas? What about archetypes? The challenge is to differentiate these tools to know which should be prioritized and used for current needs.

So what makes customer segments and customer archetypes different? Broadly speaking, segmentation focuses on which prospects are most likely to purchase your products or services based on geographic, demographic, and psychological differences. On the other hand, customer archetypes are a form of segmentation. You create characters out of your clients to have a better understanding of their motivations and mindsets.

What Is a Customer Segment?

A customer segment is a group of individuals in your audience base who are similar in specific ways. Age, gender, incomes, geographic location, interests, and purchase behavior are some of the details customer segmentation pays attention to, since these are relevant to your marketing objectives. For example:

  • Women ages 18-25 in your target customer base
  • People who have purchased product X in the last 3 months and have spent over $100 with you

Marketing divides these consumers into certain groups so your company can market to each segment effectively and appropriately. For example, a small business selling hand-made guitars may decide to market their lower-priced products to younger guitarists, based on the segment assumption that younger musicians have less disposable income compared to older ones.

Another example is how some meal delivery services emphasize convenience and nutrition to their millennial audience while endorsing “home cooked goodness” to baby boomers. Customer segmentation this way can be practiced by any business as long as they can gather, analyze, and act on information appropriately and effectively.

Business-to-business (B2B) and business-to-customer (B2C) marketing segments would also be a little different. B2B businesses would consider the industry, the number of employees, the location, and the products previously purchased from the company. B2C organizations are more inclined to segment customers according to demographics such as age, marital status, gender, location, or life stage (single, married, retired, etc.).

What you can use segmentation for: Segments are ordinarily used to create custom, targeted advertising for existing customers. You can also track changing trends and measure your marketing impact in your segments.

What segmentation won’t be able to tell you: A segment is the first step towards understanding your target audience, but it won’t explain why they do what they do. Most segments can only categorize consumers by demographics, preferences, or engagement but will not let you know their motivations, challenges, or pain points.

Reasons to Segment Your Customers

Segmentation allows your marketers to design their marketing efforts according to their target segment. Through segmentation, your organization can make better choices in communications and product design. Some specific reasons to do customer segmentation include:

  • Improve customer service
  • Focus on the most profitable segments
  • Test different pricing models or options
  • Upsell or cross-sell relevant products and services
  • Establish stronger customer relationships
  • Identify opportunities to improve products and services
  • Select the best communication channel for the segment
  • Create targeted messages to resonate with specific segments

Tips on How to Segment Your Customers

In order to segment their market, a business must gather specific data about their customers and analyze these to identify patterns. You can collect information from a variety of sources. For example, some user data can be collected from purchasing information: what products were purchased and when. Other information such as age or marital status will need to be found in other ways. Here are a few tips on how to do market segmentation:

  • Try multiple information-gathering methods: There are many ways you can collect data about customers: surveys, interviews, focus groups, or even general research on market categories. By trying alternative methods, you may stumble on valuable, untapped data.
  • Sketch your ideal client: Segments are created when you identify consumer patterns. With a set of data, you can figure out who your best potential client is. Some information you need to collect would include:
    • Demographic: Name, gender, age, income, housing type, education level, marital status, children, hobbies, and occupation.
    • Geographic: Their specific location and if they are settled in an urban, rural, or suburban area.
    • Psychographic: Values, emotions, attitudes, perceptions, believes, interests, habits, and life philosophies.
  • Use an empathy map: You need to paint a more accurate picture of who your audiences are in order to serve them better. An empathy map is one tool that allows you to be better acquainted with your customers’ psychographic. Some questions you may ask are:
    • What does the segment think and feel?
    • What does the segment see, say, or hear?
    • What are the segment’s pain points?
    • What causes “gains” for the segment?

What Is a Customer Archetype?

Pretend you are a researcher conducting interviews with several customers. As you explore how the customers behave and why they do what they do, you will notice themes emerging. Let’s say you narrowed down the behavior to bargain hunting. One consumer may be searching far and wide for a good bargain because they need to save their income for essentials. On the other hand, another person may enjoy the thrill of finding a great deal.

In marketing, an archetype follows the dictionary definition of “any of several innate patterns in the psyche”. With our example, you have the same behavior with different motivations you can split into two different archetypes.

A customer archetype is based on cultural constructs of shared meanings that help us articulate social understandings. Simply put, we use archetypes to organize narratives out of hard and soft data to bring consumers’ stories to life.

The creation of a customer archetype in marketing allows you to make sense of consumers’ lives and their rituals. From an archetype, you can predict behavior, desires, and concerns – which would definitely have value for your design process or product development stages. When you envision an archetype, it’s much easier to answer questions such as:

  • What are the characteristics of a consumer?
  • What is the goal of the product design?
  • What does the consumer focus on when they use the product?
  • What are their expectations?
  • How do they find out about things that interest them?
  • How do they solve their problems?

Compared to segments, archetypes focus on the personality of your client. An archetype is like a fictitious character that really helps you feel yourself in the consumer’s shoes.

What you can use archetypes for: An archetype can actually help improve business models. You would better understand their motivations or pain points and see how you can design a better experience for them.

What archetypes won’t be able to tell you: Archetypes are not narrow nor inspirational enough to tell your team exactly how to reach them. In cases like these, you may need to create a compelling and fully-fleshed-out persona.

5 Common Personality Archetypes

Because archetypes are closely intertwined with personality, you tend to focus more on the behavior, experience, or interaction that defines each archetype. There are a lot of pre-existing archetypes that have been identified by others before but you can also create one based on the user experience you observe in your audience. Common archetypes are:

  1. The Sage 

A sage is someone who is on the quest for truth. Everything else is secondary to their pursuit of knowledge. These people enjoy research and analysis, so they commonly serve as an advisor, expert, philosopher, and mentor to others. Most likely, they enjoy the problem-solving experience and the challenge of finding a scientific answer to anything.

  1. The Innocent 

The innocent archetype just wants to be happy. In their worldview, everyone is free and virtuous. Mostly, this archetype is composed of women and children. Their profile is traditional, hopeful, or dreamy. Some of them may have a romantic or tender side which is why nostalgia appeals to them the most. People under the innocent archetype are pure and moral values take center stage for them.

  1. The Explorer

Not every person wants to be confined to a certain type of lifestyle and this is exactly what the explorer archetype portrays. People who are explorers care about freedom. They’re looking for a life outside rather than building a home. They want adventure and innovation. Many outdoor brands naturally design their experiences to reach out to explorer types.

  1. The Boy/Girl-Next-Door 

Normal people who just want to belong fall into the boy/girl-next-door archetype. They’re looking for a reliable product that gets the job done. They aren’t pretentious, hip, or conscious about certain values. This makes it difficult for many brands to reach this archetype because they really have to appeal across all demographics. Regular, ordinary, or classic – those are the words you can associate to this archetype’s style.

  1. The Ruler

The ruler archetype craves power so they want luxury, exclusivity, and control. These people either belong to the elite class or aspire towards them. High-quality at a premium price is a crucial factor in product development for ruler archetypes. These are people looking for value and excellence in every service, product, or experience.

Connect With Your Customers Through Commence CRM

Commence Cloud CRM is an award-winning platform designed to help you engage and connect with your customers. With powerful analytic features, you can create profiles and segments for your audience easily. Email Commence CRM for inquiries today.