The Importance of Customer Segmentation


Washington Post Technology Page (2/3/2010) ran the headline “AOL posts profit, but subscribers dwindle”.
Disciplined customer segmentation and analysis will help a struggling company to reduce their operating expense by prioritizing their marketing and selling activities on the limited number of customers who produce the most revenue. The analysis may not provide an exact statistical 80%/20% breakdown but it won’t be far different.
When a company focuses on its most valuable customers it accomplishes two things:
 Improves customer loyalty and, potentially, wallet share
 Creates a model for increasing the total number of high value customers
$50M companies that aspire to be $1B companies need to build processes to continually monitor who their key customers are and why they are key customers

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