Segmentation allows organisations with large customer bases to better understand and communicate to their customers. Better understanding of customer behaviour by segment, their respective drivers and demographics allows for the formulation of appropriate strategies per segment, enabling the business to market to them in the most effective way.
A comprehensive customer segmentation analysis is a valuable tool for marketers and decision makers. By grouping customers into manageable segments based on demographic likeness and behavioural similarities, marketing strategies can be adapted to reflect the differing needs of a particular segment.
A segmentation can help identify which segments offer the biggest opportunities, then target those customers who generate the greatest ongoing profit. It can be based on products, customers, outlets (e.g. fire stations or retail stores) or even an entire market – it’s therefore useful when there is a need to classify people or things. Datamine can group similar customers or products purchased in combination (e.g. for the purposes of developing marketing strategies and/or driving communications). Like in customer profiling, we can use client data as well as potential external data (Census, Westpac, market research etc.) in order to populate any shortfalls that may exist.
The first step of this process is determining what the client is looking for – what are they going to do with the segmentation? How will they use and apply the segments? This will impact how we create the segmentation from the outset and craft the final outputs. The best way to facilitate this is through a workshop, where stakeholders from across the client's business can come together and collate their respective goals for the segmentation, offering everyone a chance to voice their opinion on how they want to see the outputs applied. In the workshop, together we’ll determine what the best type of segmentation is for your specific business challenge.
3. Operational segmentations: Designed for highly targeted activity – these are made up of potentially thousands of segments, each derived from a smaller set of behavioural variables specific to one activity. These micro segments are unstable, so this type of segmentation is about identifying certain ‘states’ and using certain customer attributes to deliver the most targeted action for that predefined state.
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