From Market Segmentation to Customer Segmentation: Opportunities for Competitive Advantage and Growth, Part 5

With low-cost e-commerce store/website visitor intercept research, you can quickly identify the different needs and shopping behaviors of your online visitors, and optimize your existing company website or e-commerce store.

* Customer segmentation: Traditional catalog and mail order marketers have known for a long time that customer segmentation based on transactions can provide quick increases in sales and profitability. For those new to direct marketing, because the same tactics can work with email to increase sales, the following are short-term opportunities to consider:

• Due to the high costs of sending catalogs and direct mail, it's imperative to model customers based on RFM, create break-even analysis, and redirect budgets for short-term sales and/or profit increases. This is a short-term strategy only; over time, it'll reduce the size of your active housefile.
• For email, RFM-based marketing won't have a major impact on profitability unless you have a huge housefile. By effectively targeting your most active customers, however, you should see increased short-term sales.

Paul Becker is a multichannel marketing consultant. Reach Paul at (702) 587-9011 or themarketerpaul@yahoo.com.