Friday, June 19, 2009

6 steps in customer segmentation in Retail industry

Having understood some of the business questions which can be answered using a loyalty segmentation framework lets explore the step by step process. There are about 6 broad steps as outlined below

Step-1: Identifying the specific context for shopper segmentation within the organization
Step-2: Creating a universal customer behavior record of the customer from POS, Loyalty and store profile information
Step-3: Configure the segmentation parameters like cluster count, cluster algorithm, maximum input attributes etc
Step-4: Execute the shopper segmentation model and characterize the segments from a business perspective
Step-5: Conduct workshops with business users to explore possibilities of differential treatment of customer segments
Step-6: Having decided on specific segment specific treatment strategies it is necessary to operationalize it in CRM and other campaign management systems and monitor business impact

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