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Company defined segments are typically created for the convenience of the company. They
often have little to do with the customer except for some gross, overall facts regarding the
relationship of the customer with the company. Conceptually at least, there is often some
overlap between this approach and the Single Attribute Segmentation model discussed below. Company-defined
segments tend to be crude and derived from internal data, and may have elements of a demographic
focus. Examples of this sort of approach include:
- Segmenting customers by product used (e.g., natural gas customer, electricity customer), where
the customer list for each product becomes a segment.
- Segmenting customers by company size (e.g., retail banking, small business banking,
middle market, large corporate), where the key-defining factor is the total sales of the
customer company - regardless of the amount of business that they do with the financial institution.
- Segmentation of customers by industry (e.g., SIC Codes), where all customers within a specific
industry are presumed to be similar.
- Segmenting by geography (e.g., region, divisions), where the responsible
parties within the company are assigned customers.
Most often, company-oriented segmentation models revolve around highly objective information
that is internally collected by the company. Alternatively, purchased data (e.g., Dun & Bradstreet data)
may be used to create the segmentation model. While possible, survey data are rarely used in creating
company-defined segments. Indeed, from the company's perspective, this is one of the primary
benefits. The simple segmentation model can be applied to all customers at a relatively modest
price, and it is constantly maintained and updated as an internal corporate process.
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