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Any consumer business is high on volume and low on margin. To improve profitability of business and
to effectively manage large pool of customers as per their distinct behavioural traits and needs, it is imperative to segment the population in smaller homogeneous segments. These segments are characterised by similarity within the segments, but with distinctiveness from other segments.
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| Our Segmentation Solutions: |
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| Descriptive segmentation: These are useful when a set of variables is pre-identified based on their importance for making marketing decisions or data availability. Examples: |
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- Behavioural segmentation: We build behavioural segments based on variables that represent measurable behavior of individuals. For a retail store, an index based on recency, frequency and volume of usage can be a good indicator of loyalty.
- Motivational segmentation: We carry out segmentation through survey data that captures variables that relate to why customers make purchases. Understanding the motivations behind transactions in such cases can be used to create marketing promotions to appeal to these motivations.
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Predictive segmentation: Is useful for identifying variables that distinguish "target customer behaviour”, example those who are more likely to buy or more likely to maintain relationship with the bank |
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- We use tree techniques such as CHAID, CART and artificial intelligence techniques extensively for identifying predictive variables (such as past purchase patterns, life- stage variables, etc.) that are drivers of the dependent variable.
- Grouping on basis of such variables in the form of a rule translates into distinct segments.
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Key benefits of segmentation are: |
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- Developing segmental marketing and management strategy for distinct segments translating to higher effectiveness.
- Predictive segmentation can be used as first generation scores; response data from such segmented promotion can be used to develop robust scores later.
- Segmentation can be done in significantly lesser time than scoring which can help business in more swift execution of strategies.
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