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How to price segment your customers

Jiro Osuga

Customer segmentation allows both you and your customers to match expectation and experience, write Thomas Stewart and Patricia O’Connell for Strategy+Business.

Like every business leader, you are undoubtedly aware of the need to identify your target customers and clearly define the service your business provides to them. In an ideal world, the service your customers expect and the service your business provides to them is identical. But it’s not always that simple, is it? Because different customers have different needs.

This is why customer segmentation is essential. For example, when you book an airline ticket, you will almost always be offered a choice. Options might include economy, premium economy, business class, first class and, in the last 12 months or so, basic economy. Thanks to these clearly defined offerings, when you book an air ticket, you know what to expect and airline staff know what is expected of them.

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Credits:
Source Article: The Power Of Price Points
Author(s): Thomas Stewart and Patricia O’Connell
Publisher: Strategy+Business