Customer Needs Segmentation


Segmentation is the process of subdividing a large group of prospects into two or more segments usually based on specific demographic/firmographic or behavioral criteria. Examples of these criteria might be geography, revenue, language, past purchase behavior, travel habits, etc. As a result, individuals in one segment are more alike, for the segmentation criteria, than individuals from different segments. Segment differences enable a business to specifically tailor their product, sales promotions, advertising, and customer care programs to the "known or expected attributes" of each segment.

Needs based segmentation is one of the most difficult to achieve with success, because it is based on questions like: what do customers want? What drives their behavior? Knowing what a customer wants requires a crystal ball. Fortunately, using a combination of predictive analytics and hierarchical clustering techniques, Inteletix has developed a statistical crystal ball, that identifies and categorizes customers based on product needs.

Imagine planning a new outbound sales campaign for a hot, hi-tech product. Part of the campaign involves the creation of a list of customers to target. Without customer needs segmentation you would probably create the list solely based on industry segments, which is only a slight improvement over calling at random.

What if you had a needs segmentation scheme in place, instead? Your list would target only those customers you knew had a "need" for the product. Additionally, to keep campaign costs low, you might further sub-select only those customers with an especially high propensity to buy the product. Essentially, you provide the sales force with a list of statistically prequalified leads. Resulting sales closure rate would increase significantly, and campaign costs would drop.

In addition to sales targeting benefits, a needs segmentation strategy facilitates tightly focused product advertising and marketing campaigns, and provides a roadmap for customer product migration (up- and cross-sales). Combined with a churn/vulnerability segmentation scheme, a business could then identify high value customers at risk of leaving for the competition and commence a retention program. learn more

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Customer Needs Segmentation