The document discusses a customer value segmentation project for NA commercial customers. It aims to define value-based customer segments, understand marketing opportunities, and create a repeatable segmentation process. Seven customer segments were identified based on dimensions like margin, tenure, purchase behavior, and channel usage. The segments are highly differentiated and have clear strategic directions. Descriptions of each segment's characteristics are provided, including number of customers, average margin, spend potential, product purchases, channel usage, and purchase frequency. Charts show segmentation by employee size, industry, and annual migration rates between segments.
1. Customer Value Segmentation
NA Commercial Customers
WW Integrated Marketing Communication
Scott Berg – Director, WW Direct and Database Marketing
Victor Howard – Sr. Manager, WW Database Marketing
2. Project Objectives
Develop clearly defined, value-based segments for NA
commercial customers
Understand best opportunities for strategic marketing
investments
Identify tactical marketing opportunities
Create a repeatable and transferable process for other
Geos (dependent on data availability)
4. Results
The Compaq commercial customer value segmentation scheme has
been successfully deployed.
Seven segments have been identified, which are highly differentiated
on the key dimensions of margin and tenure.
The segments are coded and identifiable on the database.
Strategic direction can be set for each cluster.
Actionable and measurable marketing opportunities.
Clear value propositions - significant revenue and profit.
5. 5
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65,558
81,486
133,20526,352
40,763
29,099
71,966
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1.5
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2.5
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3.5
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Transformed Margin Score
TransformedTenureScore
Crown Preserve
6.5% of Customer Base
$113,298 2-year margin
Blue Ribbon Goal
14.6% of Customer Base
$7,512 2-year margin
Reactivate Direct - 9.1%
Motivate
Capitalize Growth
18.2% of Customer Base
$1,078 2-year margin
Maximize Growth
29.7% of Customer Base
$206 2-year margin
Motivate Margin
16.0% of Customer Base
$40 2-year margin
Motivate Minnows
5.9% of Customer Base
$6 2-year margin
Reactivate Direct
9.1% of Customer Base
$1,827 2-year margin
448,429 Total Customers for 2 years
$8,887 2-year average margin
Cluster Map
6. Cluster Characteristics
# of Customers 29,099 (6.5%)
Average 2-year Margin $113,398
Compaq Spend Potential Comprise 90% of “At Potential” customers
Product Division Sell Through 95% purchased in more than one unique division during
1999 and 2000
40% purchased in 4 or 5 unique divisions during 1999 and
2000
Employee Size 57% of customers with a known employee range have
greater than 100 employees
Channel Usage 73% purchased from more than one reseller
Key Products 95% purchased an industry standard server
Generated 85% of total industry standard server margin
Purchase Frequency During each quarter of 1999 and 2000, at least 53% of
customers made a purchase.
Crown Preserve
7. Cluster Characteristics
# of Customers 65,558 (14.6%)
Average 2-year Margin $7,512
Compaq Spend Potential Comprise 40% of “Growth” customers
Product Division Sell Through 70% purchased in 2 to 4 unique divisions during 1999 and
2000
Employee Size 57% of customers with a known employee range have 16 to
199 employees
Channel Usage 45% purchased from more than one reseller
Key Products 83% purchased an industry standard server
Purchase Frequency During each quarter of 1999 and 2000, at least 30% of
customers made a purchase
Blue Ribbon Goal
8. Cluster Characteristics
# of Customers 81,486 (18.2%)
Average 2-year Margin $1,078
Compaq Spend Potential Comprise 28% of “Growth” customers
Product Division Sell Through 60% purchased in more than one unique division during
1999 and 2000
Employee Size 75% purchased from one reseller
Channel Usage 54% of customers with a known employee range have 10 to
99 employees
Key Products 50% purchased an industry standard server
Purchase Frequency Percent of customers purchasing per quarter increased
from 13% in Q1 1999 to a steady 25% in Q2 through Q4
2000
Capitalize Growth
9. Cluster Characteristics
# of Customers 133,205 (29.7%)
Average 2-year Margin $206
Compaq Spend Potential Comprise 30% of “Develop” customers
Product Division Sell Through 72% purchased in one unique division in 1999 and 2000
22% purchased in two unique divisions in 1999 and 2000
Employee Size 63% of customers with a known employee range have less
than 31 employees
Channel Usage 91% purchased from one reseller
Comprise 40% of agent direct channel customers and 26%
of all direct channel customers
Key Products 48% purchased a PC Desktop
–Generated 33% of total PC Desktop margin
Purchase Frequency Percent of customers purchasing per quarter decreased
from approximately 15% in 1999 to 10% in 2000
Maximize Growth
10. Cluster Characteristics
# of Customers 71,966 (16%)
Average 2-year Margin $40
Compaq Spend Potential 99% of customers are in the “Develop” level
–11% of “Develop” customers
Product Division Sell Through 93% purchased in one unique division in 1999 and 2000
Employee Size 63% have a known employee range have less than 31
employees
Channel Usage 92% purchased from one reseller
Key Products 25% of their total margin is from purchases of displays and
peripherals
Purchase Frequency During each quarter of 1999 and 2000, 10-15% of
customers made a purchase
Motivate Margin
11. Cluster Characteristics
# of Customers 26,352 (5.9%)
Average 2-year Margin $6
Compaq Spend Potential 100% are in the “Develop” level, comprising 8% of
“Develop” customers
Product Division Sell Through 99% purchased in one unique division during 1999 and
2000
Employee Size 61% of customers with a known employee range have less
than 31 employees
Channel Usage 96% purchased from one reseller
Key Products 39% of customers purchased Internet Products and
Services
–20% of all commercial Internet Products and Services
customers
Purchase Frequency Percent of customers purchasing per quarter increased
from 7% in Q1 1999 to 23% in Q4 2000
Motivate Minnows
12. Cluster Characteristics
# of Customers 40,763 (9.1%)
Average 2-year Margin $1,827 (1999 only)
Compaq Spend Potential Not applicable
Product Division Sell
Through
Not applicable
Employee Size 66% of customers with a known employee range have 5 to
99 employees
Channel Usage 84% purchased from one reseller
10% purchased through a direct channel
–16% of total direct channel customers
Key Products 65% purchased an industry standard server
Purchase Frequency No customers purchased in 2000
Reactivate Direct