Identifying, Differentiating, Segmenting Customers

Question 1

How would you go about assessing a company’s customer-identifying information?

Answer 1

First see how much customer identification the company already have
Then
Get customers to identify themselves

Question 2

What are some types of customer data?

Answer 2

Customer identity tag: name, e-mail, user name etc.
Internally generated data: transaction, billing etc.
Directly supplied data:
Behavioral data: purchase and buying habits
Attitudinal data: satisfaction levels, lifestyle, unmet needs etc.
Demographic data: age, income, education, household

Question 3

What are the two fundamental differences between customers?

Answer 3

1. They have different value to the enterprise

2. They have different needs from the enterprise

Question 4

Why do company’s need to differentiate customers?

Answer 4

To treat each customer differently, different customers have different needs, and represent different value to the enterprise
Customer value is future oriented
Helps an enterprise increase customers actual value and realize customers potential value

Question 5

What is customer lifetime value?

Answer 5

LTV: the NPV of the expected future stream of financial contributions from the customer
It is calculated according to the customers trajectory: positive contributions (product and service purchases) - expenses (cost of maintaining a relationship)

Question 6

How can a company gore the share of a customer?

Answer 6

By their unrealized potential value. It is the amount by which the enterprise could increase the value of a particular customer if it applied a stratus tegu for doing so.

Question 7

What do you do with these customer value categories?

1. Most valuable customers
2. Most growable customers
3. Low-maintenance customers
4. Super-growth customers
5. Below-zero customers

Answer 7

1. Retain
2. Grow
3. Streamline/automate services
4. Retain and mine for more
5. Make them profitable or churn them out

Question 8

What is the main point with LTV?

Answer 8

To differentiate among customers, have to use the same model for all customers

Question 9

What are some challenges in using multivariate models?

Answer 9

Getting the data on the variables
Calculating the parameters for each customer
Making sure the parameters stay relevant and up to date

Question 10

How do you create a valuable customer base?

Answer 10

Rank customer by value
Invest consistently in acquisition, development and retention (get, keep, grow)
Use different strategy for different valued customers

Question 11

How can you differentiate customers by needs?

Answer 11

Customers may find different uses for the same products, define customers needs, rather than product benefits or attributed, this allows the company to develop and offer other products that also meet this need

Question 12

What is operational segmentation?

Answer 12

It is driven by immediate goal, such as best response rate fora specific campaign

Question 13

What is strategic segmentation?

Answer 13

It is driven by strategic goals, such as increasing market penetration in specific customer profiles, putting customers in a box to watch them over time and see how they evolve

Question 14

What is socio-demographic and behavioral segmentation?

Answer 14

Socio-demographic: relies solely in SD variables (age, residence, gender etc.). Usually collected from research and used to understand how the company is performing across different standard segments of a population
Behavioral: aggregates people who are similar in the way they use the company’s product/service, it is usually the basis for s strategic segmentation

Question 15

What is the first step in identifying customers?

Answer 15

Knowing one customer from another - to recognize customers this can be hard when companies don’t know their end users ex: when they sell directly to retail outlets