Companies understand the potential benefits of customer segmentation-but rarely seem to apply it successfully to their businesses. A recent Bain & Company survey showed that although 81% of executives say customer segmentation is critical for growing profits, fewer than 25% believe their companies use it effectively. The authors, three partners at Bain & Company, present the results of their research on practices that ensure companies get the most value from their segmentation efforts, and through two case studies, share specifics on how these principles were applied.

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