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Carving Out More Profits With Segmentation

What you know about your existing customer can reveal hidden niches of profit for your business. Using segmentation strategies you can identify profitable customers and shift your sales efforts to those most likely to purchase. Here are a few data management strategies to produce more with what you know--

1. Psychographic filters target behavioral characteristics of existing buyers. Target buyers outside the normal course of business, understand their interests and personal motivators.
2. Multi-characteristic scoring systems use weighted criteria to measure buying probability. Measure each customer on a point scale against certain buying characteristics, higher scores demonstrate an prospect is more likely to purchase.
3. Measuring predictive behavior tells you when a purchase is likely to occur. Study the cause-effect relationship between customers actions and the purchase of your offering.
4. Industry filters segment buyers by participation in a certain market. Simply grouping by industrial code can identify groups of buyers with specific demands.
5. Financial indexes use sales revenues and credit scoring to measure a prospects ability to purchase. Used to find those buyers who are likely able to bring together the capital to acquire what you offer.
6. A top-down influencer model focuses efforts on those who influence the buyers decisions. This strategy can identify buyers or bypass the evaluation process making a decision to purchase more internal.
7. Recency-Frequency-Monetary (RFM) groups customers by their past behavior with your organization. RFM measures are some of the most basic, but most often over looked metrics of profitable customers.

Many of these filters, profiles, and segmentation strategies are easily implemented in most customer relationship management (CRM) and data management products. They can be stacked or implemented individually, the power comes from testing the cells produced. It's critical you demand your information technology team know how to provide this type of information in a timely fashion.

See also: More Market Segmentation Strategies For Profits, How to Cultivate Your 'Top Ten Percent' Customers for Greater Profits, Classifying Customers and Identify Profit Centers for your Business

/ bi-crm | profitable-customers /

By Justin Hitt at October 13, 2003 1:27 AM  Subscribe in a reader