How does customer segmentation contribute to defining the starting population?

Customer segmentation is the practice of dividing a customer base into subgroups based on shared characteristics, such as demographics, behavior, or purchase history. In the context of Pega Customer Decision Hub™, this process is fundamental to defining the "starting population" for an engagement strategy. By creating segments, organizations can precisely select and target the most relevant customer groups for specific actions or campaigns, ensuring that marketing efforts are focused and effective.

B. Focuses only on inactive customers

Segmentation can be based on any criteria, including activity, inactivity, purchase history, or demographics, not just inactive customers.

C. Reduces decision complexity by excluding all customers

Excluding all customers would result in an empty starting population, making any engagement strategy impossible to execute.

D. Automates customer engagement processes

Segmentation defines who to target. While it is a critical input for automation, it is not the automation process itself.

1. Pega Academy, Pega Certified Decisioning Consultant (24.1) Course: In the "Defining the scope of a 1:1 customer engagement" module, the lesson "Defining the target audience" explains that the starting population is defined by establishing criteria. A Segment is a reusable rule that defines a group of customers based on such criteria, which is then used to target them. This directly supports the idea that segmentation allows for the targeting of relevant groups.

2. Pega Customer Decision Hub™ 8.8 Product Documentation: In the section "Creating a segment," the documentation states, "Segments are used to identify a specific group of customers for marketing campaigns or other business actions." This confirms that segmentation's purpose is to create targetable groups, which form the starting population for these actions.

3. Pega Customer Decision Hub™ 8.8 Product Documentation: Under "Next-Best-Action Designer," the "Audience" tab configuration details how the starting population (the audience) for Next-Best-Action can be defined using specific criteria or by selecting a pre-defined Segment. This explicitly links the concept of a Segment to the definition of the starting population.