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Segmentation is about how you will treat customers that fall into that classification. The airlines do it best. While the segments maybe called differently the principle remains the same from one airline to another. The airlines usually have these five statuses that they classify customers into:
While the airplane carries all the segments at the same time, takes off and lands at the same time, each segment is treated differently before the flight, in the air and after the flight lands. Here is an example of segmentation from American Airlines which actually has five segments:
(And of course no benefits are available if you don’t have status.)
The criteria to qualify for each status is published on their website, (copy below). But you don’t have to publish the criteria and can keep your criteria internal.
HOWEVER – there is non-monetary criteria that is applied as well. For example, you are active duty, family traveling with small children, need assistance etc. you get to board the plane first!
Getting the segmentation right is critical else you will have missed revenue opportunities and customer satisfaction issues.
Imagine Customer Satisfaction issues that arise when you treat the customer as is they belong to a lower category? Or how pissed off your “boss” will be because you lost a customer as you did not focus on the and treat them appropriately.
The flip is also true, you would be wasting corporate resources by treating in a higher category.
An example of this: is (EZ1/3 US Customs & Boarder patrol )
Row 1
Row 2
Each account individually did not qualify for a dedicated account manager as they were not “big enough” but taken together they were a “big” client which required a dedicated account manager to who could sell more and manage retention.
Segmentation by revenue or geography is easy but additional criteria may exist. Here is an example where need was the segmentation criteria (READ CASE STUDY and its impact)
Segmentation goes hand in hand with the coverage model. The lost opportunities to increase margins or revenue by not segmenting correctly.
