ployees. It must be recognized at the outset that this segmentation is a serious matter. Annual Renewal of the Base Segmentation A base segmentation is not static or permanent. It would be naive to assume that the way you view customers in 1975 is the same way you should be looking at them in 2005. This means that you will have to set up some kind of formal reevaluation and refresh cycle for your base segmentation. Each year, the base segmentation scheme should be evaluated according to several criteria: 1. Does the segmentation accurately reflect the true nature of who our customers are today? Does the segmentation accurately project the view we have of our customers for the future? Has the base segmentation been useful and practical? Small changes to the segmentation plan to reflect changes in corporation direction and attitudes about customers should be anticipated and executed. STRUCTURAL SEGMENTATION The second kind of segmentation that we will consider is structural segmentation. Base segmentation tells us who the customers are, but there are other reasons for organizing and segregating customers. One of them is to determine which business units will deal with which customers in order to cover certain functions. Suppose that a telco has three products (wireless, long distance, and local) and four CRM channels (direct sales, inside sales, inside call center, and independent agents). How do we assign customers to these channels? The possibilities are almost endless. We could divide our sales forces by products (one group each for wireless, long distance, and local) or by geography (one group for every region of the country). We could divide customer coverage by type eXcellence in Telecommunications The Telco Churn Handbook of customer (consumer VS. business) or we could allocate them by our base segmentation scheme. The answer is typically a combination of these options, depending on many factors. What is certain, however, is that the structural segmentation will be different from the base segmentation. Figur