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Segmentation has two general uses: It can provide insights as a managerial or executive tool to aid in making business decisions or it may be used to target existing customers with preferred marketing more in tune with their interests or propensities.

If you are a business looking to either promote tailored products to your existing customers or add products or services to your existing line up, then finding out who your customers are is the first step in that process. This can ensure that promotions of your products or services are targeted to the customers most likely to use them.

Segmentation techniques are used to group together your customers based on different measurements. Each grouping of customers will have similar habits, views, patterns of behaviour or demographics. These groups (segments) can be created using demographic data, survey data and spending data.

Furthermore, by using statistical techniques, we can assign any new customers you have to these segments based on a set of questions when they join or sign up. This allows these new customers to be targeted directly with products or services they are most likely to want to buy.

Such information is clearly invaluable. Not only does it make your promotional activity more efficient by saving you money on staffing, postage and telephone call costs, it also makes you money by targeting exactly the right people likely to respond to your promotion.

We use a variety of techniques to segment data based on the types of data you have available. However, we would generally recommend that some of your customers are surveyed intermittently as this kind of information is invaluable for informing customer service as well as promotional based activities. It is also the best quality data for segmentation.

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