Customer Segmentation

Overview

Consumers have certain common needs and attitudes. This allows us to segment them into different interest groups for companies. Our client, a distribution company in UAE have a proper customer segmentation that allows them to take decisioned action plan.

The Challenge

Our client already had a classification of their buyers, but it was made up of too many segments (15) rendering it  too unwieldy to establish action plans. Therefore, they needed to  reduce the number of segments.

The Solution

  • Information relating to the purchase information of a group of customers, already segmented, was collected and a survey about uses and attitudes was launched to complete the investigation.
  • From this data, the segments were grouped based on qualitative and quantitative criteria and multivariate techniques.
  • It was intended that each group should have similar characteristics in terms of lifestyle and purchasing behavior.
  • Furthermore, a representative percentage of customers should be grouped, having similar expenses and purchase frequency.
  • Finally, multivariate statistical analyses were performed to create factors that would maximize the homogeneity within a group and ensure the heterogeneity with the other groups.

The Results

We managed to regroup the initial 15 segments into 6 more closely related segments. The new segmentation offered certain advantages over the former one: greater operability, greater homogeneity and greater business opportunity.