Value of Customer Relationship
Capsule: The first consideration in customer segmentation is the size of customer. Because a customer gets attention from industry competitors according to the customer’s size, customers of a similar size receive similar treatment from industry suppliers. They tend to buy in similar ways because of this.
Capsule: There usually are several suppliers of similar products in the customer’s relationship. Each of these suppliers fills a different role for the customer. Each role receives an allocation of the customer’s volume.
Growth and Profitability of Size/Role Segments
Capsule: The price the customer pays largely determines how profitable the customer is. You don’t want a fast growing customer unless the customer is profitable. If he is profitable, the faster his growth, the more you like him.