The Promise of “Self-segmentation”

"Before making large investments in advertising and other marketing, companies seek to identify and segment potential customers. Such knowledge is vital in evaluating market opportunities and differentiating messages, product offerings, media strategies, and even pricing. Today, a community-based approach to segmentation — which is both less expensive and more effective than the traditional methodologies based on customer relationship management (CRM) systems — is becoming possible as consumers flock to the Web.

Ever since the rise of the mainframe, companies have relied on CRM systems for segmentation. These systems slice and dice market and customer data, placing customers and prospects into different “buckets” based on demographic, behavioral, attitudinal, and other insights. Such segmentation enables companies to tailor product development and marketing."