What is customer segmentation

Analytics @ Speed Of Thought!
Any true blue marketer would like to know the customer he is addressing. Today, what helps him in this task is customer segmentation. Using various customer segmentation models, it's possible for a marketer to identify different groups of purchasers in the marketplace he operates in, so that he can target specific products and services for each group or segment. Needless to state, there are many benefits of market segmentation.

The process of customer segmentation begins with research followed by analysis in order to zero in on the key segments. An Enterprise must have a segmentation strategy in place at the very start. Customer segmentation allows a marketer to address each potential lead or customer in an effective manner, without a major loss in resources. Using the large amount of data available on customers (and potential customers), customer segmentation analysis allows marketers to identify with a high degree of accuracy, groups of customers based on demographic, behavioral and other indicators.
Once done, the segmentation strategy needs to be aligned with a corporate's business goals. It has also to be ranged with what's called the long-term Customer Lifetime Value (LTV). Customers have to be thus segmented according to their LTV. All of this is necessary to help the marketing team tailor its offerings such as price, communications, etc, to different customer segments in order to be able to meet the needs of customers more precisely. The aim obviously to capture as large a market share of the market the Enterprise is in.
As we said earlier, today's marketplace is highly competitive. Real time customer behavioral segmentation can be a powerful source of competitive advantage for any organization.
This edge can come from understanding not only one's own customer behavior but also from understanding how customers behave with competing products or services to get a 360 degree view.