Customer Segmentation - Data Mining Techniques in CRM: Inside Customer Segmentation - page 200

collected through market surveys and the segments are typically identified by the
application of a cluster model on gathered questionnaire responses.
In the data mining framework, needs/attitudinal segmentation is mainly used
in combination with behavioral and value-based segments to enrich the profile of
the revealed segments, provide insight into their ''qualitative'' characteristics, and
hence support:
• New product design/development
• The communication of the product features/brand image important for each
segment
• Tailored communication messages
• New promotions.
SEGMENTATION IN BUSINESS MARKETS
Consumers and business customers have inherent differences. A business market
has fewer customers and larger transactions. A decision maker, who is typically not
the actual user, makes decisions for a large number of users. Selling is a long and
complex process and involves talks and negotiations with people who are not the
end users. Furthermore, quite often there is little association between satisfaction
level and customer loyalty.
In business markets almost every customer needs a customized product,
quantity, or price. In fact, each customer can be considered as a distinct seg-
ment. The segmented marketing that successfully works in consumer markets
is not effective in business markets where a one-to-one marketing approach is
appropriate.
These fundamental differences impose a different segmentation approach
for the business markets and the use of different segmentation criteria. For
instance, segmenting customers by their behavioral and usage characteristics and
communicating the product features important for each segment have limited
effectiveness with business customers.
The segmentation criteria typically used for business customers include:
• Value (revenue or profit)
• Size (number of employees, number of subscriptions/subscribed employees,
etc.)
• Industry (government, education, telecommunications, financial, etc.)
• Business life-stage (new business, mature business, etc.).