Data segmentation is the process of dissecting the customer base into groups that have similarity to each other so that it can be used proficiently in marketing and operation. Traditional segmentation focuses on dividing and identifying customer groups based on demographics and attributes. Value based segmentation, on the other hand, keeps the revenue generated through the group and cost involved in maintaining the connection with them as factors while segmenting. By data segmentation an organization will be able to identify different levels of customer database to suit their target market.
Data segmentation process includes:
The data segmentation is done to divide customers according to their characteristics and as a result mutually exclusive groups are created with each group having similar customers and every group different from other. In a business organization it is very challenging to understand the different characteristics and prospects of customers and data segmentation helps in this regard. Due to limited in-house capabilities, outsourcing data segmentation services have achieved popularity. Also, outsourcing this service allows the owner to focus on core activities of his/her company. It helps boost the company’s growth while attracting new customers and expanding their target audience. Eventually it helps the organization to run their business in a cost effective way.
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