Maximizing Customer Value Through SegmentationCustomer segmentation allows us to create groups of customers that behave similarly in response to marketing treatments. By marketing to homogeneous segments, we can customize the persuasion process and maximize the lifetime value of customers.This is segment two of our talk about database marketing and this segment we’re going to focus on Customer Lifetime Value Maximization through Segmentation.What follows is a lightly edited transcript of Episode 2 of the Inevitable Success Podcast with Damian Bergamaschi and special guest Gary Beck,TranscriptDamian:  To drive game-changing growth marketers must be focused on understanding their customer. Today, resident expert Gary Beck shows us how.All right, glad to have you back Gary.Gary: Thanks for having me, Damian.Demographic SegmentationDamian:  This segment we’re going to focus around is getting to the root of customers, how to understand the customers in your database, and what you could do once you know who they are. The very first thing and we hear this a lot when we sit down with clients. Being in the database space for BuyerGenomics brands don’t know, even big ones, don’t know how many customers they have. They think they do when they sit and think about it they don’t. Have you ever experienced that?Gary: I have and it’s a great point. One of the fundamental challenges that many companies have is knowing the quality of the data that they have and being able to, to your point, count the number of customers – so, how many customers do I have? If there are data hygiene issues, there can be a real challenge in understanding what the customer base looks like.One of the first things that many companies will do when they ask that question, how many customers do I have, is they will first clean up their database. That will address issues such as misspellings in a customer’s name or incorrect address information that may not have been put into the system correctly. That cleanup process is usually one of the very first things that we will do.There’s also a fundamental question of, how many households are on the database?Damian:  Well that’s a great point. Could you go into detail more about that, what is a household versus a customer?Gary: Of course. So, when we look at customers we frequently will find customers who are, let’s say, a man and wife or a couple of some sort.They will use one email address for an account to conduct transactions yet we have two different customers in the universe. They will frequently show up as two different customers in a retail database that has not been processed through a traditional name and address hygiene processing system. So, one of the first steps is to make that decision concerning counting individuals or counting households, or counting accounts. There are implications in terms of how we market to people after that. For example, many traditional mailers will seek to only send one expensive catalog mailing per household if we suspect that everybody in the household will share that collateral.Typically, there’s really no need to incur the additional expense associated with multiple catalogs to the same household. So traditionally catalog marketers have marketed based on a household basis. Digital marketers who can see different behaviors by the individual might choose to organize their database based on individuals, giving them the added leverage of understanding how to communicate to one person of a household versus another person of a household who might be purchasing different products.Damian:  I can totally see the value of not getting the same catalog to your mailbox. That ultimately probably it’s really one person that householder’s who was dr...