The Customer Loyalty Solution : What Works (and What Doesnt) in Customer Loyalty Programs

Once you have captured the customer transaction data, you need to divide your customers into some sort of usable segments so that you can create a marketing program for each. How do you set up the segments? This is a problem that separates the good marketers from the indifferent ones. There are dozens of ways to do this. For example:

• Senior citizens, college students, families with children, empty nesters

• High spenders, occasional shoppers, lapsed customers

• Profitability segments

• RFM (recency, frequency, monetary analysis) segments

• SIC groups (for business-to-business marketing)