Customer Segmentation - Data Mining Techniques in CRM: Inside Customer Segmentation - page 203

A GUIDE FOR BEHAVIORAL SEGMENTATION
A segmentation project starts with the definition of the business objectives and
ends with the delivery of differentiated marketing strategies for the segments.
In this section we will focus on behavioral segmentation and present a detailed
methodological approach for the effective implementation of such a project.
This section also includes guidelines for the successful deployment of the
segmentation results and presents ways for using the revealed segments for
effective marketing.
BEHAVIORAL SEGMENTATION METHODOLOGY
The proposed methodology for behavioral segmentation includes the following
main steps which are presented in detail in the following sections:
1. Business understanding and design of the segmentation process.
2. Data understanding, preparation, and enrichment.
3. Identification of the segments with cluster modeling.
4. Evaluation and profiling of the revealed segments.
5. Deployment of the segmentation solution, design, and delivery of the
differentiated strategies.
The sequence of stages is not rigid. Lessons learned in each step may lead analysts
to review previous steps.
Business Understanding and Design of the Segmentation Process
This phase starts with understanding the project requirements from a business per-
spective. It involves knowledge-sharing meetings and close collaboration between
the data miners and marketers involved in the project to assess the situation,
clearly define the specific business goal, and design the whole data mining pro-
cedure. In this phase, some crucial questions must be answered and decisions on
some very important methodological issues should be taken. Tasks in this phase
include:
1. Definition of the business objective: The business objective will determine
all the next steps in the behavioral segmentation procedure. Therefore it
should be clearly defined and translated to a data mining goal. This translation