Identifying Opportunity

Opportunity can be defined by:

  • High penetration
    • Segments with the greatest number of your customers indicate where have been historically the most successful with your product or service.
    • Opportunity lies in finding more people like them to sell to in the market, or selling more to people already aligned with your offering.
    • Comparing customer profiles across different products or services often finds and quantifies upsell / cross sell opportunity.
  • High index
    • A high index means that you are having greater success with this segment than would randomly occur in the market. You have above average success. Retaining, increasing profitability, and acquiring more of these types of customers are all areas where opportunity can be found.
  • Low penetration
    • Shows segments where you have been less successful in acquiring customers.
    • While sometimes this can be by design (not your target market), you may find opportunity in these segments for new products, different communications and / or promotions that are relevant to this audience to realise opportunity.
  • Low index
    • Low index is often used in conjunction with high penetration.
    • While you have a significant number of customers in a segment (penetration) your programs or offering are performing below average in these segments.
    • If customers in this segment are profitable, learn from the segmentation profile and market size to align programs for acquiring more customers from this segment, or cross sell to existing customers of another product in your portfolio.

NOTE: An index is a relative measure of comparison around a base value of 100 comparing the penetration in your file (the percentage of your customers in a segment for example) and the penetration in the benchmark (the percentage of benchmark households in a segment).  Values above 100 are considered above average with values below 100 showing below average penetration relative to the benchmark, and is calculated by dividing the file penetration by the benchmark penetration and multiplying by 100.