marketing services :  penetration analysis

 

The objective here is to unlock additional potential opportunities present in the wider market by looking outwards from a client's existing customer base. We can gain a much greater understanding of a current customer database by mapping it against a known 'universe'.

Penetration analysis can be seen as an assessment of relative performance across each of the segments identified.  In its simplest form it means identifying what percentage of the total potential 'universe' are already customers.

A high penetration level is a positive indication of the organisation’s (historical) success in that segment i.e. a high percentage of customers against the potential universe. Conversely, a low penetration level suggests more work is needed to acquire customers in this segment.

But despite its obvious value, this two-dimensional analysis should only be seen as a stepping stone to the next level of possible analysis when other variables are added to the mix..... For example, total sales (in a period), average order value, contribution to profit, customer lifetime value all provide rich additional dimensions of analysis.

The benefits to customers of this analysis are likely to include:-

the identification of segments with higher potential returns

being able to target new customers in previously untapped market segments

the cost effective redistribution of finite sales and marketing resources

improved measurability for the management of sales territories and quota

increased strategic options

In order to ensure that a penetration analysis provides optimal results, 4sight will generally work through a four step process along the following lines:

1.  Validating/preparing the customer's operational customer data file(s)

2.  Matching key information to customer data

3.  Reducing segments to a workable number

4.  Analysing data against a marketing universe