Which customer groups offer the most potential?   And how can you balance maximizing customer value (attract, grow, and retain the potential) with acting in the best interest of your customers (customer experience)? These are questions that vex almost every company today. In the Automotive industry profits are under pressure, while data and content are becoming the new but challenging playgrounds for manufactures. Add to that the increasing complexities of digital customer expectations, which is driving churn rates higher and customer acquisition costs up. Many chief marketing officers are looking for direction on where to focus their efforts and resources to differentiate and grow. Understanding customer value with segmentation Understanding customer value with segmentation is definitely the first step. Customer value information, typically based on ARPU or related revenue metrics, is mainly used to guide investment decisions for marketing, sales, and customer care activities. Typical examples include the development of customised communication to high-value customers or the assignment of special resources to high-value customers in the contact channels. Value segmentation Value segmentation, however, cannot enable differentiation by itself, simply because value is an outcome. In order to truly understand their customers, organisations must also know the “why” and “how” that leads to the outcome “value.” The “why” is represented by a needs assessment — understanding the underlying motive and need behind interest in motor vehicles. Customers have common needs, shared needs, and differentiating needs. Business must know these needs at the individual customer level, which can be scored in the database. The “how” part is represented by behavior — how customers use products, channels, and how they communicate. By putting together needs, value, and behavior, organizations can then create the required insight for differentiation. Business resources are aligned to customers Segmentation will have little value unless the businesses resources are aligned to customers. The purpose of segmentation is to activate segmentation to enable “treating different customers differently” via the delivery of relevant offerings to a group of customers (portfolio) based on their needs, behavior, and value. For most operators moving to such an alignment is quite challenging because they are structured and functioning as silos. For true differentiation, customers should be managed across the life cycle. Such effort requires a disciplined approach that revolves around customer segments and extends across the customer life cycle. So, what has to change to enable the proper functioning of “treating different customers differently?” Treating different customers differently Aim: Create a clear set of strategy, action, and investment plans at the customer portfolio level Balance: Act in the best interest of customers while balancing resources. This means creating a culture of portfolio ownership and an ecosystem to coordinate the delivery, as well as making a...