Customer segmentation is key to tracking growth

More or less sophisticated techniques were used to select the promotional activity as well as the target group.

With data mining, it is possible to establish a connection between past and future behaviour and thus predicting the customer response to promotional offers based on present behaviour.

Benefits associates with customer segmentation are: First, better understanding of customer behaviour.

Secondly, additional value resulting from a better understanding of the customer turning customer data into knowledge.

Third, A deeper exploration of specific customer segments.

Specific and profound analyses can be carried out to further describe typical characteristics exhibited by segments.

Fourth, updating customer communication.

It is counterproductive to use an undifferentiated approach to address the customer base.

Each segment calls for targeted marketing actions like retention campaigns for core customers and promotional campaigns to push customers to a higher value cluster.

Analysis of the customer insight type has proved to be more effective and profitable and has allowed a deeper and more precise understanding of the population, which in the recent past was outside the realm of possibility.

Kamuya is the operations manager, SPSS East Africa Ltd. Email: Nkamuya@spss-eastafrica.com