5. Customer Segmentation and Targeting

Consumer and commercial customer behaviors are influenced by myriad factors, including an extensive set of needs and wants. However, the degree of impact that a specific need or want has on their loyalty can vary greatly from customer to customer. One person’s absolute requirement can be, for another person, merely a nice-to-have. What makes one customer defect to a new vendor might have little effect on another customer. What’s a business to do? How can a firm effectively respond to such an extensive customer wish list? If the firm cannot afford to address all the requirements, which needs should receive its focus and limited resources?

The first challenge is to define the word loyalty for your business, ...

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