Customer Segmentation For Customer Asset Management Methods And Applications

Under the more turbulent environment, enterprises should fully explicate the skills andabilities to identify, select, initiate and maintain the most profitable customer relationshipsas the effective way of pursuing the sustainable competitive advantages. Customer EquityManagement(CEM) is a new approach to marketing—one that focus the efforts of theenterprise on increasing the customer lifetime value of individual customer in a way thatseeks to maximize customer equity. Without considering the contribution of all the indirectinfluences that will cause in the firm's performance, customer segmentation modelsproposed before which incorporated the current and potential profitable contribution as theonly metrics may result the improper marketing resource allocating strategies, since theunderestimating the true value of the individual customer to the enterprise.With the expectation of providing some appropriate guidance to the relevant customermanagement strategies, this paper proposed a customer segmentation based on theprofitable contribution as well as the indirectly contribution of the individual customer tothe enterprise. The main contents of the paper include:1 Simply reviewed the study of the related models of customer equity and customersegmentation, on the basis of the concept of "contribution", argued that the customerlifetime value should be the interpreted as the customer equity contribution of theindividual customer, which is the integration of one's current value contribution, potentialvalue contribution and potential mediate.2 Provided the approaches to determine the degree of these three contributions of anindividual customer separately. Proposed a customer segmentation model based on thisthree metrics.3 In order for this model to be truly effective, applied it into a credit card setting of abank, strengthened the understanding of how to put it into practice.