Unearthing Hidden Customer Value.

PARETO principle; CONSUMERS

To get the most out of existing customer pools, companiesshould step back and consider adopting a value-basedcustomer segmentation approach, which provides a quickyet robust method to identify future customer value whileenabling companies to develop better growth, retention,and customer maintenance initiatives. In working on a customer segmentation effort withan Eastern European bank (for more about this project,see the sidebar "Taking an Avant-Garde Approach toIncreasing a Bank's Revenues" at the end of thisarticle), we identified the following three dimensionsthat create customer value characteristics: 1. Figure 1Value-based segmentation schema Figure 2Value-based segments and activation mechanisms Figure 3Value-based segmentation can serve as a road map tomove clients from low-value to high-value customers. [Extracted from the article]

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