Explore Your Customer Relationships Through SegmentologyTM

SegmentologyTM is our analytically-driven approach to customer segmentation. Our premier three-tier solution incorporates a comprehensive analysis of your customers' demographics, behaviors, and attitudes. We have also designed SegmentologyTM with flexibility in mind - we design the right solution for you.

From Insight to Dimensions
We start by identifying the types of information you would like to know about your customers and their relationship with you. We've made the process easier because we've identified the most common and relevant types of insights that answer the most typical questions marketers have:

• What are my customers worth?
• What do my customers "look like"?
• What behaviors do they have?
• What products do they purchase?
• What's important to their purchase decision?
• What channels do they use when considering a purchase?

We define each category of insight as a "dimension". Each dimension identifies one aspect of your relationship with your customers. More importantly, our analysis identifies how your customers differ with respect to one another within a dimension. For instance, not only do we define customer value, but we identify who your most valuable customers are, how they differ from the rest of your customers, and what that means from a business perspective.

We have three tiers of dimensions. Tier 1 incorporates Customer Value (or LTV) and LifeStage, which are two key pieces of information every marketer should know.

Tier 2 requires more transactional information, incorporating overall Brand Engagement (the customer lifecycle), price / discount sensitivity, Channel propensity, and a definition of the different Competitive Environments in which you operate.

Tier 3 incorporates the most in-depth dimensions, including product affinity (market basket analysis), and attitudinal drivers, which requires primary research, and maps the different attitudes to your database with amazing accuracy.

Segmentology is all about providing you with the most appropriate information for your objectives. You can select just one dimension as a starting point, or a combination of dimensions for a more comprehensive view of your customers.


Learning from Dimensions
Dimensions are the building blocks for developing SegmentologyTM Segments. We provide a comprehensive and insightful analysis for each dimension. In-depth findings, based on analysis of your customer data, provide details specific to your customers' behaviors, and what it means for you. Furthermore, we identify customers with similar behavioral patterns, and categorize customers into groups with respect each specific dimension. So, there may be four Value Tiers, seven unique Lifestages, six different levels of Brand Engagement, and three levels of Price Sensitivity among your customers. Each one of these dimensions provides an important clue to the type of relationship you have with a customer.

Each dimension is also coded onto your database ("High Value", "Household With Children", "Emerging", "Extremely Price Sensitive", etc.). This allows you to incorporate these dimensions into your marketing activities, as well as your reporting infrastructure. It is important to leverage the insights from the analysis in tracking the quality and behaviors of your customers across dimensions.

By having individual dimensions coded on your database, you can specifically market to relevant subgroups as required. Examples:

• Special reward or shopping experience for all High Value customers
• Back-to-school mailings to lifestages With Kids (assuming the analysis shows this to be a profitable group)
• Focus clearance events on Extremely Price Sensitive
• Test re-activation mailings to customers with Minimal Brand Engagement

Building Segments
Once the dimensions have been built and analyzed, they are combined to create the ultimate in marketing customization: Segments based on customized behavioral analysis, demographic study, and research into why your customers buy (or don't buy) from you.

Our dimensions utilize methodologies that lead us to final segments that are crisp (no fuzzy clouds here), insightful, and relevant. They are also easy to understand, implement, and track. While the statistical process is called Latent Class Modeling (similar to cluster analysis, only more appropriate for the types of variables found in dimensions), there is a mix of art and science working together to craft the ultimate segmentation solution. For more information on the process of creating and finalizing segments, please see Custom Fit: The "Right" Segments for Your Business.

The end result is a comprehensive customer segmentation solution, usually encompassing 7 to 12 customer segments that vary from each other significantly in terms of the relationships you have with them. Segments generally fall into three categories:

• Destination Segments: Higher-value segments that typify ideal relationships, but differ from one another in terms of the style of interaction, the reasons for purchasing, and/or the products and services they buy;
  
  
• Transitory Segments: Typically mid-value segments with a lower-level of engagement, with some characteristics that indicate which Destination Segment they may grow into over time;
  
  
• Lagging Segments: Inactive or disengaged customers, who may be only tangentially involved in your category.
  
  

Your marketing team, merchandising, and agency team will find incredible value from the ultimate SegmentologyTM solution, incorporating the specific segments and the individual dimensions.

Getting it Done
There are different levels of SegmentologyTM, based on the dimensions required for the project. These range from a low level of complexity (only two or three dimensions), to our most comprehensive, based on utilizing dimensions from all three tiers. The less complex solutions can be completed in 4-8 weeks in most cases, while the most complex solution can require up to 20 weeks or so, due to the use of primary research in the analysis.

A complete SegmentologyTM solution (using all three dimension tiers) incorporates custom primary research, demographic overlays, competitor location information, transaction detail, and product hierarchy information to provide the most complete solution available today. This project begins with a significant amount of planning, and a kick-off meeting with all key stakeholders. Our clients are involved during the project to ensure that the analysis does address the core needs of the business, and at milestones in the project there are stakeholder meetings to review findings and share insights. The project ends with an executive presentation, which includes segment boards and detailed write-ups.

You may find yourself in a situation where you have an existing segmentation scheme in use within your organization. However, you would like to supplement your segmentation with additional dimensions from SegmentologyTM . No problem at all - we can leverage what you already have, and add to it to provide more insight and value to investments you've already made.

Whatever your situation, you likely have questions that SegmentologyTM can answer. To find out more about applying the principles of SegmentologyTM to your business, please call us today at (847) 805-9802, or email brukstales@cac-group.com!