Marketing Consultant - J902
CRM and database marketing practioner required by leading B2B data marketing agency to advise blue chip client base on marketing led solutions This role is primarily a client relations More...
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segmentation

Not all customers are created equal

  Faced with potentially thousands (if not millions) of customers each with their own demands from your product how does the marketer manage to communicate with them all effectively?

SEGMENTATION

By grouping customers together by overriding characteristics the marketer can reduce the myriad of demands from their potential customer base to a more manageable number

Much as this regales against our feeling of individuality the fact remains that human nature pigeon holes people in order to easier understand them. This is exactly the driving principle behind segmentation. 

The ultimate segmentation is one to one where your personal needs are the defining characteristics. Tesco with their Clubcard system run by dunn humby are striving towards this and with a wealth of data and analytical expertise at their disposal who is to say they will not achieve it and the gauntlet will be well and truly laid

There are two main methods of segmentation, Rules Based and Clustered:

Method 1

Segments are created using Rules Based on key transactional, demographic and lifestyle variables

 

Easy to construct and interpret; the viability and size of segments can be engineered by choosing bandings appropriately; differences between segments are guaranteed in the dimensions selected. However segments will be homogeneous only with respect to the 2 or 3 dimensions used to define them; individuals in the same segment will be treated alike, irrespective of any other differences; the technique is less appropriate for complex behaviour/attitudes/ etc.

Method 2

Using statistical Clustering techniques based on the distance between customers in terms of key transactional, demographic and lifestyle variables.

Can employ large number of dimensions (drivers) to cope with the fact that customers are complex; number & size of segments can be controlled by the procedures; homogeneity & significant difference between segments are statistically ensured (& are optimised) by the analytical method. However individuals in the same segment are similar in the chosen dimensions but not identical; clustering is a mixture of science and business sense – it needs to be done by an expert; not as easily explained.

 

              customer profiling             segmentation                

 market sizing                 web analytics 

single customer view