Why Customer Segmentation?
save money and improve profits based on targeting groups with unique marketing campaigns
Cost Savings: Rather than using resources to send out marketing tactics to every customer, can decide based on segments which customers will be most likely to respond with a purchase.
Profit Improvements: By using the segments to determine who is more likely to make a purchase, you can target those customers and will have a higher return on your marketing investment.
For Example, if you have customers with high frequency and monetary value but low recency, you may want to remind them of your existence and perhaps give them a discount code to encourage their business. Customers with high frequency, recency and monetary value, you may want to show them your appreciation to keep them as a good customer.