Customer Segmentation - Data Mining Techniques in CRM: Inside Customer Segmentation - page 201

More specifically:

1. Value based: Customer value is one of the most important segmentation cri-
teria for both consumer and business markets. In business markets, ''customer''
value is typically measured at multiple levels:

(a) Per employee/subscription level for all subscribed employees within one
corporate customer.
(b) Per corporate (corporate account) level.
(c) Average profit of all subscriptions/employees within one corporate customer.
(d) Per industry.

Consequently, value segmentation is also tackled at multiple levels. Usually,
the differences in terms of value among corporate customers are quite large.
The need to build and establish loyalty among the top-value customers is critical
since, in general, they account for a substantial part of the organization's total
profit.
2. Size based: Business customers are usually ranked and grouped according
to their size, based on either their total number of employees or their total
number of subscriptions (subscribed employees). Table 5.2 describes a relevant
size-based segmentation scheme.
3. Industry based: Corporate customers can also be divided according to their
industry with the use of a standard industrial classification system. A relevant
high-level industrial categorization is listed in Table 5.3.

Table 5.2 Size-based segments in business markets.

Size category Size-based segment Definition

• Multinational accounts
• Government accounts
•Corporate

• Multinational
• Government
• Number of employees greater than 200

Large

• Business
• SME (Small and
Medium Enterprise)

• Number of employees between 50
and 200
• Number of employees between 10
and 50

Medium

• SOHO (Small Office,
Home Office)
• Self-employed

• Number of employees up to 10
• Independent professionals -
freelancers

Small