Customer Segmentation in the Big Data Marketing Era

[Former Member]

Customer Segmentation is the art of defining and selecting the group of customers that are most likely to respond to an offer, and is a key practice for nearly all marketing and sales organizations. In fact, successful Chief Marketing Officers (CMOs) excel in exactly this area*. In the era of big data, marketing leaders across the globe wonder:

 

• With the explosion of channels like mobile, social, and others, how do I establish a 360 degree view of my  customers and not be limited to what is inside my CRM system?


• How can I slice & dice all this customer data really fast?


• How do I create true customer insights based on that data?

 



Figure 1: SAP CRM Customer Segmentation

 

SAP has been investing into High Volume Customer Segmentation over the last few years and we continue to do so. SAP’s rich portfolio of in-memory computing technologies, SAP HANA in particular, offers a number of new options for IT to deliver a solution to the line of business marketing that offers:

 

• A beautiful user interface


• High speed performance on big data


• 360 view on customer across different data sources


• Flexibility for business users


• Consumption of analytical insights from data mining / predictive analytics


• Integration into the overall business process campaign management and marketing planning


• Tangible business results in driving revenues, margin and marketing effectiveness

 

In this blog I want to provide you with an overview on:

 

1. What are the solution options that are available for SAP CRM customer segmentation today?


2. How do I find the right deployment option for my organisation?

 

We currently have 4 options available for segmentation but there are only 2 questions you need to ask yourself in finding the right one:

 

1. Do you run SAP Business Warehouse (SAP BW) and do you need SAP BW data in the customer segmentation process?


2. How many customer records do you have/plan to have in your SAP CRM database?

 



Figure 2: Finding the right deployment option for SAP CRM Customer Segmentation

 

Classic segmentation falls in the realm of low customer records where you do not need to enhance query performance.

There are two cases for Classic Segmentation:

 

1) If you do need BW data, you should be okay for up to 500k records;

2) if you do not need BW data then you can go up to 1 million customer records.

These are rules of thumb and there are other factors involved which may lead to higher or lower boundary values.

 

High Volume Segmentation means that we  have to leverage in-memory computing technologies such as SAP HANA or the SAP Netweaver Business Warehouse Accelerator (BW-A) to speed up the query performance. Again we have two cases based upon whether you require BW data:

 

1) If no BW data is required you can run the Customer Segmentation accelerator powered by SAP HANA;

2) if there is BW data involved we recommend SAP CRM in combination with SAP BW powered by SAP HANA (BW on HANA).

 

There is a last option mainly for customers who have BW-A, and don't want to purchase BW on HANA yet, they can run the segmentation against BW and BW-A as well.  However, it is our clear recommendation to go for the SAP BW powered by SAP HANA option as soon as it fits into the organisations overall BW strategy since there will be no further investment in BW-A. So only the HANA options come with all of the new features, data mining and predictive analytics as an example.

 

So, we do have a solution for everyone and to find the right deployment option you simply need to ask what is the volume of data and whether SAP BW data is part of the mix. The next chart adds one more level of detail and provides you with an overview on the required releases per deployment option:

 



 

Figure 3: Recommended release per deployment option

 

In conclusion, Chief Marketing Officers (CMOs) should take a close look at SAP’s new rapid deployment solution offerings for customer segmentation, which are capable of affordably addressing their immediate marketing segmentation pain points. A SAP rapid deployment solution is a delivery option that enables companies to be up and running with SAP solutions in as little as a few weeks. To get more details on this rapid deployment solution for segmentation (only a 5 week implementation!), please follow this link.

 

*IBM CMO Study 2011

 

 

For more information about Customer Segmentation, check out this ‘Document’ on experiencehana.com

 

 

 

 

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