Customer Segmentation in Loyalty Marketing

Customer Segmentation in Loyalty Marketing is an analytical technique for a customer evaluation and segmentation within the concept of Total Loyalty Marketing (TLM). The authors are German specialists Anne M. Schüller and Gerhard Fuchs.

The segments are shown in the chart. The horizontal axis shows the evaluated relationship and loyalty and the vertical axis shows the benefit from customers and their profitability for the enterprise.

Use of the customer segmentation in practice: Customers at the left bottom have a hostile relationship to the enterprise and in fact it is harmful - e.g. by negative expressions in different social networks and discussion forums. The enterprise should have for this type of customers an adequate communication strategy. The more we are moving the axes to the right and up, the more friendly and loyal, helpful and profitable the given segment is. The enterprise should develop such marketing activities to get the customers from the lower left segments to higher right segments.

Especially loyal customers and promoters and fans should be totally engaged in social networks and discussion forums as well as an appropriate way to reward their loyalty.