Behavior-Based Segmentation and Customer Lifetime Value

Shopping lately at Amazon and getting into Database Marketing class, my last term, made me rethink the whole notion of segmentation analysis. For decades, and just personally for me, for the last 5 years, I categorized target markets/customers by psychographic and demographic data.  While, people watching and further character studying always amused me with identifying their behavior patterns and action tendencies. At the same time, it never occurred to me how the two can be well-connected in the behavior-based segmentation process.

CRM (Customer Relationship Management, Customer Equity Management) concept is not a novelty, but today I started getting excited about the idea and its application. For the last 6 months, I have been buying books on things of interest for myself at Amazon in a “triplets” manner to use free shipping service. Oddly enough (not so oddly), now I get promotional messages to buy 3 with 1 free = total 4. And guess what, I started looking for the next 4 that I want to read. It works on me and everybody else! It changes my behavior and increases my usage. “Books that might interest you” feature is not even mentioned as we all are so used to it! I wish all my online clothing shopping experience got me personalized style advice based on my purchasing behavior!

What I most looking forward to is to actually being able to calculate my lifetime value to Amazon as a customer by the end of this class…and to other services that I might reconsider! Stay tuned…