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Segmentation
Leveraging customer transactional information
The Client
Home improvement retailer
The Challenge
Our client wanted to leverage customer transactional information collected at store registers to identify the most valuable customers in each segment. This would allow the company to:
- optimize its direct mail and online marketing channels across its strategic customer segments;
- optimize store SKU mixes based on each segment’s home improvement needs;
- track customers’ migrations across segments;
- maximize direct mail marketing campaigns’ ROI within the strategic customer segments.
The Breakthrough
SIGMA’s Strategic B2C Solution
SIGMA developed a customized Consumer Segmentations System (31 segments rolled up to 10 strategic segments) for the client’s credit card and special order customers (22 million households), based on:
- department purchases
- total sales, dollars spent per visit, average time between visits, number of visits per customer, number of visited stores
- demographic/customer life stage (age, household income, home value, net worth, length of residence)
SIGMA’s Strategic B2B Solution
SIGMA developed a customized Professional Segmentation System (50 segments rolled up to 13 strategic segments) for the client’s credit card and special order customers (22 million households) based on:
- department purchases
- total sales, dollars spent per visit, average time between visits, number of visits per customer, number of visited stores
- Firmagraphic/Business Stage (primary/secondary SIC classification, annual sales volume, year business established, number of employees)
The Win
For the first time in its history, our client was able to identify:
- customer segments behaving as contractors disguised in consumer accounts.
- purchase behavior and life cycle characteristics of its most valuable customers.
- marketing strategies customized to each segment’s household needs and potential.
Our client’s marketing group was impressed with the findings. They are now able to:
- be proactive in identifying retention/reward and growth opportunities,
- personalize their customer communications and store SKU mixes.