1st June 2012

Customer segmentation

Academics define customer segmentation as the practice of dividing a customer base into groups of individuals that are similar in specific ways relevant to marketing, such as age, gender, interests, spending habits, and so on. Using segmentation allows companies to target groups effectively, and allocate business resources to best effect.

I prefer to avoid academic definitions and look at customer segmentation as the most effective way of identifying the clients who can provide you with most profit going forward. It can also help you identify the clients that are costing you time and money.

Watch our videos to see our views on customer segmentation:

Part 1 - the impact of segmentation

Part 2 - the proposition matrix

To complete your own proposition matrix use this document.

Once you've segmented your client bank and are clear about your most profitable segments and those who drain your resources, it's time to define a profitable proposition to deliver what all companies strive for: the right message to the right people at the right time. So how can you do that simply and efficiently?

John Joe McGinley - Head of Business Brain, Aegon

RDR, Panacea Comment