When creating a new customer group, what can it be based on?

When creating a new customer group, basing it on purchase history and customer category is particularly effective because this approach allows for the segmentation of customers according to their buying behavior and classification within your business.

Utilizing purchase history enables a company to identify trends, preferences, and patterns in how different customers interact with products or services. For example, this information can help in understanding which products are frequently bought together or which customer segments tend to make larger purchases. This data can then inform targeted marketing strategies, inventory management, and personalized customer service.

Additionally, categorizing customers based on defined attributes, such as their overall classification (e.g., retail, wholesale, VIP), helps tailor experiences and communications to meet the specific needs of different customer segments. By focusing on these metrics, businesses can enhance customer engagement and improve their sales strategies, ultimately fostering customer loyalty and increasing revenue.

In contrast, other factors like demographics and region, social media preferences, or marketing campaign responses might be useful for various marketing activities but do not provide the same direct insights into purchasing behaviors that are integral to forming effective customer groups. Basing groups on purchase history and customer category offers a more tangible foundation for understanding customer needs and driving business strategies.