Segmentation in Customer Relationship Management | Free Essay Example

Segmentation in Customer Relationship Management

Words: 658
Topic: Business & Economics

Customer segmentation is an important part of the business activity in general and a highly effective customer relationship management practice. The information obtained through segmentation allows personalizing goods and services offered by the company and thus ensure its relevance to the customers. Its advantages are best described through its three main achievement goals. First, segmentation increases customer satisfaction – a more precise targeting of customers’ needs has the potential to create more value, enable adjustments to the services offered by the company, and sustain customer satisfaction (Rouse, 2015).

Second, it contains the possibility to expand the customer base by outlining the currently untapped markets, strengthening position among the existing ones, and minimizing the expenditures associated with less relevant ones. Third, it can improve the efficiency of the business both directly (through increased revenues resulting from a more relevant product) and indirectly (through optimization of the internal operations and team management).

Considering the goals identified above, it becomes clear that three primary factors must be considered during the resource allocation process. First, since the primary goal of the campaign is the funding of cancer research, potential donors willing to participate in charity must be prioritized. Customer service is the most important segment in this area since it contributes greatly to customer satisfaction and engages the target group in charitable activities. Staffing will also be required to facilitate a strong marketing campaign and retain more customers.

Second, it is important to address the segment that holds active sports as its primary area of interest. While its paying capacity can be lower than that of the previous group, it will provide a necessary unity and establish a reputation for the event. Finally, the involvement of climbing requires investment in safety, both factual and perceived, to invoke the feeling of security in customers regardless of their level of climbing skills. This area is most important for inexperienced participants. Since the latter primarily facilitates customer satisfaction while the former two also have the direct potential of revenues, the budget must be allocated as follows: 40% for the potential donor group, 20% for the active sports group, and %40 for the inexperienced group (and safety in general).

Consequently, the most relevant tactics would be targeting the identified segments through social media and formulating a compelling mission statement before the event, a press release to announce the event, regular updates on funding progress bundled with the announcements of the achievements and prominent events at the end of each day, and a round-up after the end of the event. The expected combined effect of these tactics would be the customers’ feelings of making a difference and contributing to the important issue while at the same time engaging in appealing activities.

Considering the focus on customer satisfaction, several metrics should be incorporated into the annual assessment. Aside from the ticket sales, the degree to which people have enjoyed the event should be measured (Maya, n.d.). This can be done by inquiring about which aspects were perceived as more relevant and whether these responses match the projections conceived at the beginning of the event. It would also be necessary to determine the readiness to refer their friends and partners to the event to model the future activity and increase the predictability of the outcomes.

Finally, two main aspects are recommended for inclusion in the next customer segmentation. First, the payment capacity of the customers should be estimated to allow for a more predictable campaign profitability planning. It is certain that some of the visitors have limited possibilities and/or desire to invest in cancer research. Second, the likely skill level is to be estimated, which would allow for a better difficulty balance in the sports activities (“How to measure,” n.d.). Combined with the segmentation by the purpose of attending the event, such inquiry is expected to outline at least four customer segments which would improve the relevance of the specific tactics and more precise resource allocation.


How to measure charity performance and impact. (n.d.)

Maya, T. (n.d.). 9 eventprofs share their most important event KPIs.

Rouse, M. (2015). Customer segmentation.