Translating Information into Action

Information must be actionable, if it is to be of value to you. That means it must include a customer profile (most often consisting of demographics and buying behavior—psycho-graphics—that enables you to assign all of your customers to one or another of your defined segments. Unless you’re both ready and able to use the results of all this effort to alter your marketing strategy, your money is probably better spent elsewhere. Segmentation only pays off if you use it to fine tune your marketing program.

If you have computed the lifetime value for each segment, you can now make a very scientific assignment of resources to customer groups. You can be selective in this process. If you choose, focusing on just a few segments—or even one. In fact, that may be a good way to validate your ideas before you institute any large-scale changes in your marketing strategy. The important thing is that you use the information to adapt marketing into a more customer-focused and less product-centered approach.

Often you can finance new marketing initiatives by re-deploying the budgets previously spent in pursuit of unprofitable business, because you can now recognize it for what it is. Screening out can be as important as targeting.

You can then assign an appropriate percentage of your marketing budget to each segment which merits pursuit, echoing the percentage of profits that segment has the potential to generate. Consider members with lower grades within a well-defined, profitable segment as areas of opportunity. You know that companies with a given cluster of needs and buying behaviors can be profitably attracted to your offerings and way of doing business. All that remains is to focus on expanding penetration there.

Put your marketing imagination to work. Because you now understand the priorities of each segment so well, you’ll also know how to determine the most potent messages for each, and the media mix that can best deliver it. In addition, because the economics of each segment are clear, you can develop a plan that matches communications alternatives to allotted budget on a cost-per-contract basis.

As a result, most of your money will be invested where the profit potential for developing loyal customers is the greatest. Whilst this strategy appears to be self-evident, it too seldom happens in real life decision-making, since quantification of potential profitability by market segment is sadly lacking.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit, and my Lectures.