omers). Recombinant Requirement As with all segmentation, the structural segmentation scheme must map back to the base scheme. Every customer in a structural segment should have a known location in the base segmentation established by the firm. Application of Structural Segmentation Developing a sound, formal structural segmentation is critical to the firm for several reasons. If you formally define for each of the business units which segments they are supposed to be working with you will eliminate at least the most basic contention between units. The formal declaration of structural segments will eradicate the gray area between units. eXcellence in Telecommunications The Telco Churn Handbook Structural Segmentation Defines the Responsibility of the Business Unit More importantly, the formal structural segmentation can become the principle tool used by the firm to define the responsibilities of the business units for the care and maintenance of the customer relationships. By forcing all units to declare their objectives in terms of segments, you develop business unit accountability for those customers. Structural Segmentation and Budgeting One of the very important benefits of a formal structural segmentation process is that the negotiation of budgets for a given department can be tied directly to the customer segments they are taking responsibility for. The process infuses an increasing sense of responsibility for customers and accountability for their management. WAR SEGMENTATION So far, the segmentation schemes that we have been talking about have been basically passive in nature. They exist to provide people with guidelines and boundaries that help direct their activities. All segmentation is not passive, however. WAR segmentation is a good example of a more active approach. Wallet Share Acquisition Retention INTERNATIONAL Figure 12-3: WAR Segmentation Chapter 12 Purpose of WAR Segmentation We use the acronym WAR (wallet share, acquisition, and relationship management) to establish the three main objectives 