How 'Generation V' Will Change Your Business - WikiLeaks (15 pages)

1 recommendation for crm managers • 0 achieve customer loyalty through relevance • figure 6. the evolution of customer segmentation

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Publication Date: 3 January 2008/ID Number: G00153798

Page 11 of 15

© 2008 Gartner, Inc. and/or its Affiliates. All Rights Reserved.

customers according to which ones are actively buying. This approach is useful in some
tactical situations, but it fails to consider customer needs.

• The shortcomings of segmentation based on customer value is driving growing interest

in segments based on customer needs, effectively creating segments based on why
customers buy certain products.

• An emerging approach is a wants-based segmentation approach. Here, companies are

providing avenues in which customers and companies can explore and discover what
customers desire, and provide the same. Virtual worlds, such as Second Life, are
examples of companies setting up sandbox scenarios, where multiple personas can
explore wants or "desires" that companies are attempting to fulfill.

Figure 6. The Evolution of Customer Segmentation

Needs-Based

Segmentation

Value-Based

Segmentation

Product-Based

Segmentation

Wants-Based

Segmentation

Life cycle

Life stage

Lifestyle

Current

value

Future value

Lifetime

value

Owned/nonowned

products

Demographics

Persona mgmt.

Implicit behavior

Sandbox

scenarios

Customer-

Centric

Organization-

Centric

Product-

Centric

Persona-

Centric

"Tell Me What

You Need."

"What's the

Bottom Line?"

"The Only Product

You'll Ever Need."

"Let's Explore What Your

Persona Really Wants."

Needs-Based

Segmentation

Value-Based

Segmentation

Product-Based

Segmentation

Wants-Based

Segmentation

Life cycle

Life stage

Lifestyle

Current

value

Future value

Lifetime

value

Owned/nonowned

products

Demographics

Persona mgmt.

Implicit behavior

Sandbox

scenarios

Customer-

Centric

Organization-

Centric

Product-

Centric

Persona-

Centric

"Tell Me What

You Need."

"What's the

Bottom Line?"

"The Only Product

You'll Ever Need."

"Let's Explore What Your

Persona Really Wants."

Source: Gartner (December 2007)

Markets will be increasingly based on intangible elements of the product. The idea of one value
proposition applying to every product purchaser is increasingly unlikely.

6.1 Recommendation for CRM Managers

Move away from product-centric segmentation and involve more value- and persona-based
segmentation.

7.0 Achieve Customer Loyalty Through Relevance

Most companies say they want loyal customers, so they try to build relevancy in marketing as a
way to facilitate loyalty. The steps toward garnering customer loyalty involve the basics, such as
promising an item that a customer needs and then delivering it (for example, an airline promising
to take customers from Point A to Point B, and getting them there safely and on time).

This system also works in the virtual world. As you move up the loyalty hierarchy and toward true
loyalty, eliciting a "feel-good" factor from interactions leads to continued relationships, such as
ascending a six-step staircase (see Figure 7).

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