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The Value of Customer Segmentation

Author:  Roger Sumner

My visits to customer sites have led me to notice that customer segmentation means different things to different companies.  Some think of it simply as the ability to route customers based on the reason for their contact – they have billing or account questions, they want product information, or they need technical support.  Others view segmentation as a vehicle for really impacting customer satisfaction or customer value to the business.  The latter approach is more powerful because it allows for more targeted marketing efforts based on characteristics such as personal profiles, buying behaviors, service expectations or cross-sell opportunities.

Companies in various industries can use customer segmentation to maximize customer relationships through the personalization of services.  For example, insurance companies sometimes deliver different levels of service to customers based on the number of policies and the length of time they hold their policies.  And, airlines often identify and reward frequent customers. 

Saks Incorporated is a great retail example.  The company launched a strategic customer segmentation strategy so to identify its best customers and give them special treatment.  Saks has done a great job with this initiative, and has realized some pretty impressive results – a new priority service for its premium customers, an increase in the number of calls handled, and a reduction in average time to answer, to name a few.

A successful segmentation strategy cannot be implemented without the right technology.  Intelligent routing capabilities, such as data directed routing or skills based routing can ensure that your customers are getting to the most appropriate agent or self-service applications, based on their tier or segment.   Using business intelligence tools (analytics) can help you establish customer value.  And, desktop scripting tools used in conjunction with analytics and routing can help you make sure that the appropriate message is delivered for each customer at the time of contact.

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