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Customer-Value Based Segmentation:
 An Overview
Bruce Ratner, Ph.D.

Segmentation is not a new technique, as it is time and again used as a product-centric way of dividing a companyís population by focusing on demographics related to the business at hand ("firmographics") that align products to market segments. What is new is the process of dividing a firm's population that shifts to a customer-centric segmentation, where the polestar is on customer attributes of needs and value. The attributes appertain to the relationship between a customer and the firm, and the customerís lifetime value. A successful customer-value based segmentation (CVS) is one that provides an understanding of when and how a customer is likely to derive value, and how the firm can effectively implement marketing programs to provide that customer value and achieve its marketing goals. The purpose of this article is to illustrate with a financial services organization case study the CVS process: 1) Perform CVS, 2) Perform targeted (response) modeling per segment from the CVS, 3) Develop segment-based positioning statements, and marketing strategies that will achieve favorable customer response, and 4) Implement segment-based marketing strategies through marketing communication and sales force activities




For more information about this article, call Bruce Ratner at 516.791.3544 or 1 800 DM STAT-1; or e-mail at br@dmstat1.com.