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Top Market Strategy by Elizabeth Rush Kruger

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Chapter 10

Define the Profitability Segments

Appendix 2 compares highly profitable customers with other customers in the report on JetSpray's top market segment, while Appendix 6 shows how to append proxy variables to the data in an Excel worksheet. Appendix 4 specifies the keystrokes for defining the profitability segments with the following steps:

  1. Define purchases as the proxy for volume of items, and calculate each respondent's purchases.
  2. Define the loyalty index as the proxy for potential profit per item, and determine each respondent's score on the loyalty index.
  3. Define the profitability index as the proxy for potential profit from customers, and multiply purchases by the loyalty index to determine each respondent's score on the profitability ...

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