June 07, 2010

Summer Segmentation

This summer, we're going to talk a bit about segmenting customers.

See, it turns out that this is one of the most important times in history to actually slice and dice customers. Our customers are going in a myriad of different directions. Back in 1995, you could do a simple RFM analysis, and you'd be in good shape, because you had a one-dimensional business.

In 2010, your customer is a few years into the early stages of a great diaspora ... a once homogeneous audience is now dispersing itself across a nearly infinite number of micro-channels. What is important, here, is that while customers adopt an increasing number of micro-channels, overall response does not improve --- you know this because you look at annual retention rates, and your annual retention rates have not improved in a decade. When the number of micro-channels increase and overall response fails to increase, you have tremendous "optimization" opportunities!

So, we're going to explore segmentation this summer. Get ready!