A new approach to customer targeting under conditions of information shortage

Abstract

Purpose

To present a new model for customer targeting when the information in customer databases is limited.

Design/methodology/approach

An original conceptual framework is proposed, the customer targeting funnel model, supplemented by a composite mathematical model for optimizing decisions related to customer targeting for marketing initiatives and a flowchart to guide its implementation by marketing planners, all in the business‐to‐context and under conditions of information shortage. This “toolkit” facilitates the targeting of customers most likely to enter into closer relationships with the company, even when a significant proportion of their key characteristics have to be estimated.

Findings

A case example from China, describing a computer‐based support system for the implementation of the model, shows that the user company strengthened its customer service strategy, won higher satisfaction and loyalty levels, and achieved sales growth 50 percent above the industry average.

Research limitations/implications

The model is at an early stage of its development, and such additional features of customer behaviour as churn should be incorporated in future. The effectiveness of the model and system needs to be tested in a wider range of cases and situations..

Practical implications

Techniques of customer targeting based in consumer marketing need to be adapted appropriately for transfer to industrial marketing, and this paper offers one case in point. Shortage of customer intelligence is common in various sectors worldwide, and especially in developing countries such as China.

Originality/value

An innovative approach to customer targeting in the special conditions of industrial or business‐to‐business marketing.

Citation

Yu, Y. and Cai, S. (2007), "A new approach to customer targeting under conditions of information shortage", Marketing Intelligence & Planning, Vol. 25 No. 4, pp. 343-359. https://doi.org/10.1108/02634500710754583