Creating a new Customer group is very simple and can be key in configuring Catalog Promotions and Shopping Cart Promotions.
From your Administration site, navigate to Customers > Customer Groups
1) Click on the Add New Customer Group button:
Next, you'll see the following :
2) Enter a Group Name.
3) Assign the Tax Class as Retail Customer.
4) Click Save Customer Group
And there you have it! Customers can now be assigned to the newly created group. Click here to learn how to assign a customer to a specific Customer Group.