What is the primary difference between customer segments and customer groups?

The primary distinction between customer segments and customer groups lies in their intended use and functionality within the Magento system. Customer groups are specifically designed for pricing strategies, allowing merchants to set different pricing tiers based on the group a customer belongs to. For example, a store may have a regular customer group and a wholesale customer group, each with its own pricing structure.

On the other hand, customer segments are utilized for marketing purposes. Segments allow businesses to categorize customers based on various behavioral or demographic factors, such as purchase history or geographical location. This categorization helps in targeting specific groups of customers with tailored marketing campaigns.

By understanding this difference, businesses can effectively leverage customer groups to manage pricing strategies while utilizing customer segments to enhance their marketing efforts. This differentiation is crucial for optimizing both revenue and customer engagement strategies.