Thursday, October 12, 2006

Fluid Segments

Why do we need leaky buckets?

Most approaches to marketing base execution on segmenting customers or prospects. So far so good.

Using a top-down, hierarchical system similar to the Dewey Decimal system for books requires that each and every customer be in one and only one slot. This requirement rests on the ability of some central authority to make that decision. It can result in some quirks: Books on office productivity, e.g. "Word" are in both the 000s (Generalities) and five stacks away in the 600s (Technology).

However, segmentation is fluid with respect to both time and objective. Customers change and our reason to communicate changes.

A more natural tool for segmentation may be the concept of 'tagging'. Joshua Schacter, founder of and MIT Technology Review's "Innovator of the Year" has shown that using user-defined categorization (segmentation) ends up being a pretty good way of organizing the web. At any point in time a Web page may have any number of descriptors as a way of improving memory and recall.

Since a customer can be both "High Value" AND "Vulnerable" at the same time; additional flexibility in segmentation schemes is required and tagging makes an interesting choice.

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