ith some kind of behavioral segmentation. eXcellence in Telecommunications The Telco Churn Handbook Behavioral Segmentation - Foundation of Segmentation To say that behavioral segmentation is in fact the prerequisite to almost any meaningful segmentation exercise is a very strong statement to make. However, it is also very well founded. What understanding about your segmentation activities do you actually have if you do not include behavior? Take your population of customers and segment them by any of the other segmentation criteria you can think of. Divide them by age, sex, geography, or lifestyle. What does that segmentation by itself really tell you? You will know how many of your customers come from each of those groupings. But how useful is that information, really? You will know, for example, that females in the south are more likely to be customers than males in the north. But it does not give us the critical piece of information that we are desperate to have, namely, what kinds of customers are these people? Suppose we find that females in the south are the most frequent customers we have. We might then assume that we should target our marketing activities more in that area. But what happens when we look at the behavior of those females and find that they are in fact the worst customers we have, spending only small amounts of money, running all kinds of credit problems, and using large percentages of customer service expense? Suddenly, the group that looked good when viewed from a non-behavioral perspective looks terrible when the behavior is taken into account. Sales and Buying Behavior By far the most common form of behavioral information available is the customer's buying behavior. Every company keeps track of their customers' sales records (it is how customers are billed). Therefore, it is usually fairly easy to get your hands on that type of information. Chapter 11 The Basic Revenue Approach Customer buying behavior numbers can take several forms, but the most common is to report the monthly revenue 