Oops! The input is malformed! Understanding Customers Through Segmenting Data by Bill Inmon - BeyeNETWORK India


Understanding Customers Through Segmenting Data

Originally published 12 January 2006

Taking an active stance is the way to obtain the Holy Grail for retailing and many other businesses. When you’re active, you can lead marketplaces, rather than follow it. You can set trends. Being innovative, you can determine the timing of events according to your own needs, not someone else’s. Clearly from a corporate standpoint, this is better than merely reacting to your marketplace.

So how do organizations position themselves? The easiest way is to project what may happen in the future. Usually when one suggests predicting the future, images of a fortune teller or a psychic come to mind. Indeed, that is one approach. (Not one, however, that I would recommend!) But there are much more reliable, realistic ways to foresee the future.

The story begins with understanding your customer. This means gathering large amounts of integrated information and segmenting the customer data. Of course, you should carefully adjust your assessments as your segments of customers eventually change.  

And what do you get out of segmenting your customer base? Among other things, you get a feel for who most of your customers are. Doing this allows you to answer various questions about these customers. Are they men or women? Are they young, middle aged or older? Do they live in urban or rural areas? Are they upper, middle or lower class?   

Getting a handle on who forms the majority of your customer base is the first step to attempt to predict the future.

The next step is to create or purchase a “lifetime event” map. Essentially, a lifetime event map is a mapping of what life events a person usually encounters. Such information in these typically includes:

  • Birth
  • Teenage years
  • Begin dating
  • Interested in sports
  • Interested in fashion
  • Interested in music
  • Goes to college
  • Gets a credit card
  • Joins a sorority/fraternity
  • Gets engaged
  • Graduates from college
  • Gets first job
  • Gets married
  • Works and advances career
  • Has first baby
  • Buys life insurance
  • Buys a house
  • Has second baby
  • ………………..

Then, the lifetime event map is matched to the demographics of the segmentation of the customer base. With this information it becomes easier to peer into the future. Once you can assess the future needs, finding a way to place your corporation to be ready to serve them is possible.

I have outlined many variations to this scenario. One variation is the extent to which the lifetime event map can be developed. The lifetime event map can be analyzed very finely or can be used at a somewhat summarized level. A second variation is that of exploring submarkets. Instead of looking at existing demographics, organizations can look at subsets of their existing customer base. An organization can determine where they want to be, rather than where they currently are, with regard to the demographics of their customer base.

Obviously, predicting the future is an art. It is simply applying common sense to important information about your customer.

SOURCE: Understanding Customers Through Segmenting Data

  • Bill InmonBill Inmon

    Bill is universally recognized as the father of the data warehouse. He has more than 36 years of database technology management experience and data warehouse design expertise. He has published more than 40 books and 1,000 articles on data warehousing and data management, and his books have been translated into nine languages. He is known globally for his data warehouse development seminars and has been a keynote speaker for many major computing associations.

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