Bismart ABC Client Analysis

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What does the ABC customer technique consist of?

ABC customer segmentation is a technique used in customer management and marketing that classifies customers into categories (A, B and C) according to their value to the company. This methodology is based on the idea that not all customers have the same impact or importance for the business, so it is necessary to prioritise resources and efforts according to the contribution of each group. Here I explain what each segment consists of:

  • Segment A (High Value Customers): This group represents the most valuable customers for the company. They tend to be a relatively small percentage of the customer base, but contribute significantly to the volume of revenue. These customers tend to make frequent purchases, buy large quantities or buy premium products/services. The strategy for this segment focuses on retention and satisfaction, as losing these customers could have a significant impact on revenue.
  • Segment B (Medium Value Customers): This group includes customers who have a moderate value for the company. They are not as strategic as Segment A, but still make an important contribution to the business. They tend to represent a larger part of the customer base compared to Segment A. The strategy for this group may include initiatives to increase purchase frequency, increase transaction value or improve retention.
  • Segment C (Low Value Customers): This segment covers customers who have a lower value for the company in terms of revenue generated. They may be occasional customers, who make sporadic purchases or who generate a low volume of sales. The strategy for this group often focuses on operational efficiency and deciding whether it is worth allocating significant resources to retain them or whether it is more beneficial to focus on segments A and B.

ABC segmentation is a valuable tool to strategically allocate resources, personalise marketing strategies and improve customer management. By understanding the relative value of each segment, companies can make informed decisions on how to direct their efforts to maximise return on investment and improve customer satisfaction.