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About Marketing Segmentation Metadata

Segmentation is the practice of dividing a customer base into groups that are similar in specific ways such as demographics or behavior that are relevant to marketing. Marketers use segmentation to target groups of customers and allocate marketing resources effectively.

Typically, customer segmentation involves the following activities:

• Collecting data from a variety of sources and integrating the data into a single view of the customer base.
• Determining the quantity of customers or potential customers who share certain characteristics.
• Identifying a group of target customers for the purpose of delivering a marketing treatment or message.

Typically, customer types targeted for marketing messages are individuals, businesses, or households. However, special circumstances might call for segmentation to be performed for other entities such as bank accounts, opportunities, or assets. Segmentation involves grouping these targets based on a specified set of characteristics. You specify these characteristics by executing criteria against the customer data set. The criteria that you use to identify targets can be simple or complex and is usually based on Boolean-type logic using set operations and parenthetical operations.

For example, a marketer might identify high-value customers that have a risk of churn based on the following customer characteristics:

(Customers in the top 10 percent based on total order revenue Or Customers in the top 10 percent based on the volume of orders)

AND

(Customers who have not bought anything in the last 1 year)

AND

(Customers whose average service resolution time exceeds the company average)

By expressing such criteria in a sequential fashion, you refine a group of targets.