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How To Segment Customers

Think of your customer list as an investment portfolio

April 10, 2004
In building a successful customer-focused distribution business, it's critical to focus on customers with the greatest profit potential. Dividing your customer base into groups or segments is the fastest way to identify them. What is a customer segment? How many segments should you have? How is customer profitability information used to create and use segments? This article is an excerpt from the new book, More to the Bottom Line: Customer Profitability Analysis Tools for Distributors. Go to NAW Publications for more information and to order.

How many segments should you have?

The right number of customer segments depends in part on the size, but mostly on the complexity, of your business. A meaningful segment is a ...

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