Business Analytics for Sales and Marketing Managers: How to Compete in the Information Age

VALUE-BASED SEGMENTATION CREATED FROM DATA WAREHOUSE INFORMATION

This section is about how, based on typical DW information, you can identify the most valuable customers. Usually it is recommended that you start your activities by understanding what your customers want, since this is the essence of being able to create an effective sales process. However, there can be many reasons why you cannot establish a needs-based segmentation. Perhaps your organization did not provide you with proper guidance about which segments to pursue. Perhaps the data does not show any different needs among your customers, or there simply are no different customer needs. Perhaps you only want to target one of the segments within the needs-based segmentation model and from now on you want to approach your prospects based on who historically generates the highest profits. However, since we do not have any campaign data to go by, which is a prior assumption of this section, we can look into our DW and profile the most valuable customers and target them. In many ways this exercise is very similar to what is presented in the section called “Profiling Target Groups.” Focus is not on improving the hit rate of an existing campaign but on how to identify valuable customers for a new campaign.

Overall, this method is very valuable in situations where the list of potential customers is too long for you to contact them all. In such a situation, you would prefer to have this list sorted somehow, so that you can ...