Customer Segmentation

Customer Segmentation

Customer segmentation involves sorting customers into groups based on similar characteristics.  This process leads to an understanding of the differences among customer groups.  Segmentation helps service groups understand:

• Who is ordering, receiving, and using the products/services?  Similarly, who is not?
• What categories of products/services are delivered to which customers? 
• Are particular customer segments using certain products/services more than others?  If so, why?
• Has the delivery of products/services increased, decreased, or remained the same for customer segments?  Why have these changes occurred?
• How can a service group tailor product/service offerings to better meet the needs of its customers?
• Do service group IT systems provide enough information to answer these questions?

Often, the data to answer these questions are available but not examined.  These data may provide some valuable insight into decisions regarding future product/service offerings (e.g., specific products offered, service hours, etc.).

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