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bc
Customer Segmentation
Author:
Laird Reed
Contributors: Barbara Bilodeau, Dorie Krawiec
March 1998
Copyright? 1998 Bain Company, Inc.
Customer Segmentation
? The customer segmentation concept
? Applications
? Customer segmentation steps
– segment customers – choose target segments – create value propositions for target segments – determine profit potential of serving target
segments with value propositions
? Examples
– needs-based – behavioral
? Key takeaways
Agenda
bc
BOS customersegmentation.PPT 2
Copyright? 1998 Bain Company, Inc.
Customer Segmentation
Agenda
? The customer segmentation concept
? Applications
? Customer segmentation steps
– segment customers – choose target segments – create value propositions for target segments – determine profit potential of serving target
segments with value propositions
? Examples
– needs-based – behavioral
? Key takeaways
bc
BOS customersegmentation.PPT 3
Copyright? 1998 Bain Company, Inc.
Customer Segmentation
Customer segmentation is an important tool for customer analysis.
Context
Cost
Customers
Competitors
Capabilities
Strategic ? To identify cost
Purpose: reduction opportunities
Tools:
? To identify
? To achieve
revenue and
differentiation
profit maximizing
and to preempt
strategies
competitors’
moves
? Customer Segmentation
? Purchase Criteria Rating
(Importance Analysis)
? Company Positioning
(Effectiveness Analysis)
? Attractiveness Analysis
? Value Proposition
Development
? Customer Retention and
Loyalty
? Customer Acquisition
? To determine the
strategies that fit best with a company’s core competencies
bc
BOS customersegmentation.PPT 4
Copyright? 1998 Bain Company, Inc.
Customer Segmentation
The Process
Customer segmentation is a process of identifying homogeneous groups of customers. Once customers have been segmented, a company chooses target segments and approaches each segment with a value proposition that meets the segment’s needs.
Segment customers (existing and potential)
? Each customer segment desc
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