Segmentation And Customer Loyalty

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Executive Summary

Loyal customers are important to businesses because they offer a steady revenue stream, higher profit margins and enthusiastic referrals. But in a down economy, price sensitivity can trump loyalty. To strengthen the bonds with these high-profit potential customers, innovative companies are deploying enterprise-wide strategies built on consumer segmentation. These strategies go beyond the classic marketing applications of segmentation to drive customer-facing aspects of a business. Among the strategies: (a) Real estate departments select sites based on surrounding population profiles (b) Stores are remodeled to meet the needs of specific target groups (c) Customer service departments differentiate their response scripts according to how long a caller has been a patron (d) Merchandise is fine-tuned to meet the lifestyle preferences of the most loyal customers and those with highest profit potential

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