Customer Segmentation and Targeting Matrix

The Customer Segmentation and Targeting Matrix is a 2x2 matrix used to identify customer segments and target them with appropriate marketing strategies.

At a very high level, the Customer Segmentation and Targeting Matrix is used in the context of business, marketing, finance.

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What is the Customer Segmentation and Targeting Matrix?

A visual explanation is shown in the image above. The Customer Segmentation and Targeting Matrix can be described as a matrix with the following quadrants:

  1. High Profitability & High Potential: Target with strategies that focus on retention and loyalty (e.g. discounts, loyalty rewards)
  2. High Profitability & Low Potential: Target with strategies that focus on maintaining current level of profitability (e.g. discounts, incentives to purchase more)
  3. Low Profitability & High Potential: Target with strategies that focus on increasing value (e.g. discounts, incentives to purchase more)
  4. Low Profitability & Low Potential: Target with strategies that focus on reducing costs (e.g. discounts, incentives to purchase more)

What is the purpose of the Customer Segmentation and Targeting Matrix?

The Customer Segmentation and Targeting Matrix is a 2x2 matrix used to identify customer segments and target them with appropriate marketing strategies. It is based on two criteria: the customer's profitability and the customer's potential. Each quadrant of the matrix represents a different segment of customers, and each segment should be targeted with a different marketing strategy.

The top-left quadrant represents the most profitable and potentially valuable customers. These customers should be targeted with strategies that focus on retention and loyalty. For example, offering discounts or loyalty rewards.

The top-right quadrant represents customers who are profitable but have low potential. These customers should be targeted with strategies that focus on maintaining their current level of profitability. For example, offering discounts and incentives to purchase more.

The bottom-left quadrant represents customers who are not profitable but have high potential. These customers should be targeted with strategies that focus on increasing their value. For example, offering discounts and incentives to purchase more.

The bottom-right quadrant represents customers who are not profitable and have low potential. These customers should be targeted with strategies that focus on reducing their costs. For example, offering discounts and incentives to purchase more.


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What templates are related to Customer Segmentation and Targeting Matrix?

The following templates can also be categorized as business, marketing, finance and are therefore related to Customer Segmentation and Targeting Matrix: Effort Impact Matrix, Gap Analysis Matrix, Growth Share Matrix, Kraljic Matrix, Outsourcing Matrix, Quadrant Analysis, Risk Analysis Matrix, Risk Value Matrix. You can browse them using the menu above.

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