Dissecting a CDP’s Segmentation Engine
How does segmentation and audience creation happen within a customer data platform
CDPs can perform different flavors of segmentation, and there are different ways to engineer a segmentation engine.
Segmentation types
CDPs implement different types types of segmentation. A distinction is generally between types of segmentation that generate a MECE segment (mutually exclusive, collectively exhaustive) and those that generate overlapping segments. Another difference is the method of segmentation, whether it is a static or dynamic (also referred to as adaptive segmentation).
MECE Segments (Segment assignment): With the MECE Segment type, the segment assigns customers to one of multiple segments using the MECE principle. This assignment can happen, for instance, when leveraging methods such as K-Means clustering, or running RFM segmentation (Recency/ Frequency/ Monetary value).
Overlapping Segments (Audience Eligibility Rule): Overlapping Segments type of segmentation allows to evaluate different eligibility rules, for instance, whether the customer should receive different types of communication. The overlapping segment evaluation only considers one set of segmentation rules at the time.
