Discovering customer segmentation analysis
2010-03-16
Customer segmentation analysis is widely considered a crucial tool for modern marketing, but it is still an uncharted frontier for many institutions. A recent column at Clickz by Foviance director of analytical consulting Neil Mason pointed out that if an organization isn't doing customer segmentation analysis right, it may not be reaping the benefits.

Most users deploying self-managed tools, says Mason, are engaging in what can be called "deterministic" analysis. This strategy requires hypotheses to guide analysis, which can be a time-consuming process. Regrettably, lost time can mean lost value - customer trends don't stand still waiting for marketers to catch up.

On the other hand, "discovery" segmentation is a more complex, but most often more beneficial process. As Mason describes, it, it uses "statistical and data mining algorithms to look for differences in user behavior." This can include cluster analysis, neural networks or decision trees. Mason points out that though these processes are highly technical there is an "analytical art" to the strategy as well.

An article at OnWindows on the subject of customer analysis pointed out that many marketing firms have the expertise to provide companies with this kind of analytical support. Microsoft retail industry market development manager told the website that marketers on the cutting edge "are looking at predictive analytics to better determine the right assortment of products and forecast inventory needs in specific geographies."

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