10 Principles of Segmentation Analysis in Direct Marketing...

Database Marketing is the most sophisticated selling process in the world today.  It’s the foundation of the highest level of direct marketing – “1 to 1” made truly possible.  There is a catch though…you start with individuals and then find ways to organize them into groups.  Segmentation Analysis is an important component of database marketing.  These are the 10 Principles of segmentation analysis as they apply to direct marketing. 

1. Segmentation is useful for strategic planning and improving Direct Marketing results.
2. The closer the mode of segmentation is to the product, the greater the utility.
3. There is more than one way to segment the market even within product class.
4. You must exercise discipline and restraint on variables to be input into model.
5. If there is truth in the segments, different segmentation techniques will product essentially the same segments.
6. It is desirable to have a theory about the way a given market segment works before starting the project and looking at the output.
7. Nomenclature can be a key to the ultimate utility of segmentation analysis by marketing management.
8. Presentation of the segments can be crucial to ensuring use by marketing management.
9. Linking non-demographic, non-transactional segments to know structural data can significantly increase their utilization.
10. The closer one can get to specific behavior or transactions of individuals or organizations, or the smaller the aggregation units used for analysis the more useful the results are likely to be.