Customer Segmentation - Data Mining Techniques in CRM: Inside Customer Segmentation - page 214

• Fine tune the scoring procedure, assigning customers to segments.
• Create size and profiling reports for each segment.
Step 2: Evaluate and position the segments
This step involves the evaluation and positioning of the segments in the market.
The possible opportunities and threats should be investigated in order to select
the key segments to be targeted withmarketing activities tailored to their profiles
and needs.
In this phase the involved team should:
• Conduct a market survey to enrich segments with qualitative information
such as:
- Needs and wants
- Lifestyle and social status.
• Analyze segments and:
- Identify competitive advantages.
- Identify opportunities and threats.
- Set marketing and financial goals.
- Select the appropriate marketing mix strategies: product, promotion,
pricing, distribution channels.
• Select and define the appropriate KPIs for monitoring the performance of
the segments
Step 3: Perform cost-benefit analysis to prioritize actions per segment
Effective segmentation management requires insight into the factors that
drive customer behaviors. Behavioral changes, such as customer development/
additional purchases and attrition, should be analyzed through data mining and
market research. The important drivers for each segment should be recognized
and the appropriate marketing actions/interventions that can have a positive
impact on the customer relationship with the organization should be identified.
Finally, a cost-benefit analysis can enable the prioritization of the marketing
actions to be implemented.
The analysis per segment should include:
• Identification of the main factors of profitability
• Identification of the main cost factors
• Assessment of the importance of behavioral drivers.