Segmentation Dimensions

The first step in a segmentation exercise is to select the attributes based on which we will differentiate the customers or accounts, i.e. if we want to differentiate customers based on their height and the colour of their eyes, and in this case height and eye colour are the 2 attributes (dimensions) based on which we will segment our customers.

In CEX360 we use the term dimensions to refer to the attributes used in a segmentation.

There are many categories of dimensions that can be used in a segmentation including but not limited to:

• Socio-demographic i.e. gender, age, income, education, etc
• Professional i.e. customer specialty, a very common dimension in Pharma customer segmentation
• Attitudes i.e. attitude towards innovation (early adopters, followers, traditionalists) or attitude towards technology
• Size and potential i.e. the current or potential revenues generated by the accounts (key accounts, large accounts, small & medium accounts) or customer potential expressed in number of patients treated for a certain disease or indication
• Adoption i.e. the level of adoption of the company’s product or portfolio (aware, trial, user, loyal) or general affinity with the company (High, Medium, Low)
• Behaviour i.e. attributes that describe what motivates customers and how they make decisions (Science Oriented, Patient Oriented, etc)

The critical question to answer when selecting a dimension to include in a segmentation is “How do we plan to differentiate the marketing mix between 2 customers that have different values on the same dimension?”

For example we may want to use customer potential as a dimension if we plan to invest more resources (more contacts) in High potential customers than in Low potential ones.

If we don’t have a clear answer for the question above we probably should not include that dimension in the segmentation.

See the Managing Dimensions section for more information about how to create and manage dimensions in CEX360

Collect data about the individual customers / accounts

Also known as profiling, this is the action of collecting the individual values that each customer or account has for each of the selected dimensions: i.e. The Hypertension Potential of Dr John Smith is 200, meaning that Dr John Smith treats 200 patients with Hypertension per time unit (i.e month/ quarter). The Hypertension Potential is the dimension used and 200 is the value (data point) for Dr John Smith.

An individual customer or account should only have ONE value for each dimension. More precisely in a segmentation exercise we should take into consideration only one value per dimension: if Dr Smith’s Hypertension Potential has changed in time we should consider only one value (the latest) in the current segmentation exercise

See # Customer Profiling chapter for more information about data collection and review

Define the business rules describing each segment

According to the definition a segment is a homogenous group of customers or accounts, meaning all the customers/accounts that are similar will be part of the same segment. In this step we need to define what makes 2 customers from the same segment similar and what makes 2 customers from different segments different.