From the course: Marketing: Customer Segmentation
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Creating a clearer picture of customers
From the course: Marketing: Customer Segmentation
Creating a clearer picture of customers
- [Instructor] Segmenting your customers by usage requires you to do some data analysis. When you analyze your internal data on purchase patterns, profitability by customer and order volumes, you can use standard deviations or divided your customers either by deciles, use the Pareto method, or share of wallet. For any of these, you start by figuring out the factor that matters most to your company. If you have the ability to assess profitability at the customer level, that's likely the best measurement tool. However, in some service businesses, it's hard to determine which customers generate what level of profit. The one who spends a lot of money may also consume a lot of staff time, so you can always judge simply by revenue. Even in a traditional product business, you have different gross margins by product line. Some businesses segment by unit volume. This is how most airlines segmented their customers, until a couple…
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