Evaluating Customer Segmentation Methodologies PPT

This PPT slide, part of the 47-slide Customer Segmentation PowerPoint presentation, presents a comparison of 3 customer segmentation methods: needs-based, behavioral, and demographic. It emphasizes that needs-based segmentation, while the most time-consuming to execute, offers the highest value. This method requires primary research to gather insights directly from customers, ensuring that the resulting data is both descriptive and actionable. It effectively identifies customer needs and the drivers behind their purchasing decisions, which is crucial for crafting tailored value propositions.

In contrast, behavioral segmentation also necessitates primary research, but only when behavioral data is not already available from the client’s existing database. This approach provides moderate usefulness, showing correlation rather than causation. It describes purchasing behaviors, but lacks depth in understanding the underlying motivations.

Demographic segmentation stands apart as it typically does not require primary research, relying instead on readily available demographic data from clients. However, its usefulness is limited, often showing low correlation and never causation. The insights gained are primarily descriptive, failing to address the drivers of customer behavior.

Overall, the slide underscores the importance of selecting the right segmentation method based on the depth of insight required. For organizations aiming to develop effective strategies, investing in needs-based segmentation could yield the most actionable insights, despite the higher initial effort involved. This comparison serves as a guide for decision-makers considering which segmentation approach aligns best with their strategic objectives.

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Customer Segmentation Value Proposition