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CONSULTING BY SIERRA INFORMATION SERVICES

Customer Segmentation

Customer segmentation is more than just applying cluster analysis or other multivariate statistical techniques to your data. Effective segmentation occurs only when substantive knowledge of market, customers and data sources are combined with appropriate data preparation and substantive judgment. Sierra's engagements in this area include:

• Segmentation analyses of the residential customers served by a major Northern California public utility. Identified “clusters” which were then described/labeled via intensive examination of the demographic, financial, lifestyle and related “attributes” of the customers assigned to each cluster. Results were then joined to another data table containing projected increase/decrease in monthly bills under several proposed new rate plans. Performed all data management and preparation, implemented statistical clustering routines, selected an “optimal” number of “segments,” and then assessed impact of new rates on customers assigned to these clusters. Results enabled the utility’s management to understand how the proposed revised rate plans would impact readily-identifiable “segments” of their residential customer base before proposing the new plans to senior management and state public utility agency regulators.
• Customer segmentation and intent-to-purchase/repurchase analyses for an international manufacturer of computer storage devices and related software products. Analyses identified of 'clusters' of similar customer groups along various 'environmental' measures, such as size of company, size of computing environment, and computing environment complexity, which were then used to develop advertising campaigns targeted to these groups.
• Cluster and other multivariate analyses of variables relating to patient access member satisfaction and operational indicators for the medical group of a large Health Maintenance Organization. Results were used to help develop performance standards used by medical office managers and physician chiefs-of-service to measure progress towards meeting goals for patient access to health care services in a timely manner.
• Customer segmentation and marketing campaign response analyses for the saving and investments division of a large bank. Created statistical models predicting likelihood of customer response to sales campaigns for mutual fund, retirement account and other investment products as a function of customer account balance levels, product portfolio and demographic characteristics.