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Utilities - Segmenting the Small and Midsize Business Market
E SOURCE, Sep 2001, Pages: 21
Segmentation is a market research term for taking a large group of customers and, through the application of various statistical and analytical methods, dividing those customers into smaller groups based on similar business characteristics, needs, or behaviors. This allows companies to target programs, products, and services more effectively than a mass-market approach, which treats small and midsize business customers as one homogeneous group.
Although competitive companies routinely segment their customers in order to market products and services most profitably, regulated energy utilities have been less likely to do so. They have typically relied on 'hard' characteristics such as energy revenues, consumption, or company size to divide up their commercial market. But this report and the case studies it contains show that there can be any number of good reasons for a regulated utility to invest in segmentation research based on 'soft,' or attitudinal, factors that illuminate customer needs, behaviors, and preferences. Improved customer satisfaction ratings and higher participation rates for energy-efficiency programs are just a few goals that attitudinal segmentation can help achieve.
The caveat is that, although segmentation has the potential to benefit any company, it is not an endeavor to be undertaken blithely. Good segmentation programs are long-term in scope, evolving, and expensive. Most experts agree that without a very clear idea of what information you want, how you plan to use it, and what you hope to achieve with it, segmentation is probably just a good way to waste valuable time and resources.
Find out how utilities can segment, and are segmenting, the small business market based on attitudinal factors that illuminate customer needs, behaviors, and preferences. We also look at the benefits utilities can derive from such segmentation.
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