Customer segmentation can be relevant in many different contexts. When you lay out a new strategy or develop new products, it is a great advantage to know which customer segments the company is targeting. And perhaps just as important, which ones you don't.
Some of the questions a customer segmentation can answer are whether your customers act and think as you think they do and whether their acting and thinking patterns have changed. Another important insight is which group of customers generates the most revenue and earnings. And if there is untapped potential.
Divide e.g. your customers according to the following criteria:
Choose the two most important – ie. those that best express the customer's needs. By inserting the two selected criteria into a matrix, you divide your customers into four segments. Eg:
Source: Lars Bo Hansen, Strategy development (2005)
Insert the basic data of the segments in the model below:
Source: Lars Bo Hansen, Strategy development (2005)
Based on the above analysis, you can get a picture of whether you are doing well or poorly in the segment. And where there is untapped potential. Consider e.g. also how the market is expected to develop in the future.
Map the segments according to current and future selection criteria. Use e.g. interview, questionnaire, ask your salespeople and the marketing department to clarify which criteria customers make their product choices based on.
Typical selection criteria are:
Identify the two most important criteria for each segment now and in relation to their expectations for the future. Complete the form below for each of your segments:
Source: Lars Bo Hansen, Strategy development (2005)
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