Tip 3: Use dynamic behavioral segmentation instead of traditional ABC segmentations
Once you have gained an insight into your customers’ behavior (and you know how valuable that behavior is thanks to the customer lifetime value), this can be applied through segmentation, thereby improving your customers’ experience – given that increasing customer lifetime value is your ultimate goal. Of course, segmentation is nothing new. For years, businesses have been splitting their customers between different segments (A, B, C or Gold, Silver, …), often based on the level of turnover generated. However, segmentation based on historical sales figures falls short when it comes to offering your customers the right products and services at the right time or via the right channel when it comes to future sales.
For segmentation, artificial intelligence is a godsend. It analyses all (un)structured customer data and uncovers traceable patterns. From loyalty cards and POS systems to call center data, invoices, emails, shopping baskets, social media, web data and data from ERP systems, the more information, the more valuable the insights, while the more detailed the behavioral segmentation, the more effectively you’ll be able to offer your customers a personalized experience. What is more, as customers’ behavior changes throughout the year (a continual phenomenon!), they will shift dynamically between different segments, meaning that they will always fit into the most appropriate behavioral segment possible. This truly is customer-focused marketing.