Failing to take into account changes in customer behavior and needs.
A single successful market segmentation is not the end of the process. We may know what a customer needs today, but does that mean they will have the same needs in a year, two years, or five years from now? This may or may not be the case. The manufacturer may be in the business of making clothes for company employees. But what if companies start to adopt a more casual dress code? Does the customer in question still have the same need to dress smartly? A bank may want to grant as many loans as possible. However, the government may introduce higher contribution requirements. If this is the case, will the demand for the bank's personal loan acquisition services still be the same?
Times of crisis and segmentation?
Customer segmentation is crucial in times of economic crisis. Proper segmentation and subsequent analysis of customer groups make it possible to determine which customer categories account for the largest share of revenue. Segmentation allows the company to optimize its strategy and focus on the most profitable activities for the company. In addition, proper segmentation helps to identify customer segments that will incur high costs in trying to reach them. In such cases, it may happen that the potential revenue generated does not recover the marketing costs incurred.