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How to Segment for Actionability & Success

Last week I shared the twelve questions you need to be able to answer in order to ensure you really know your target audience. If you missed it, you can read it here. The post certainly attracted a lot of hits, so I hope you have all found ways to improve your own customer underst anding as a result of reading it.

All br ands and services need a group of customers that they are going to satisfy, since it is impossible to appeal to everyone most of the time. This means that you will need to make a choice about who you are going to target, which also implies that you must accept that you will also ignore some other category users.

Last week I read a really great post by Colin Nelson of HYPE on how a simple segmentation of employees enabled Swisslog to underst and and improve participation in their innovation ideas campaigns. I highly recommend reading this case study as it shows how even the simplest grouping of a market – in this case employees – can be both actionable and successful.

Segmentation can be as simple or as complex as you like, but is essential for all successful businesses. If you yourself are struggling to underst and your consumers, employees, retail customers, or any other group of people, perhaps a segmentation exercise is what you need to run.

 

 Where to start

When deciding who to target, most companies will start by conducting some sort of data gathering. This could be as simple as identifying your users by what you observe, such as young men or large families, or as complex as gathering your customers’ values and motivations. As mentioned in last week’s post, the deeper the underst anding of your target customer is, the more likely it is to provide you with a competitive advantage. The same also goes for segmentation.

 

Do you have the MIDAS touch?

Choosing the golden segmentWhatever method you use for segmenting and choosing your target group, the results of your exercise need to meet the following five conditions, known collectively as the MIDAS touch:

Measurable: The individual groups need to be clearly defined and quantifiable using KPI’s such as size, market share, value share
Identifiable: Each segment must have a distinct profile and each customer must be attributed to only one segment
Definable: Every cluster must be easy to describe and share with others, so that you have mutual underst anding of each of them
Actionable: The groups must be easy to identify, in order to be able to target your actions and communications to them
Substantial: The chosen segment must be financially viable to target, which means that it should in general be stable or growing, and durable over the long term

All good segmentations or groupings will fulfil these five key conditions, so it is easy for you to evaluate the results of your segmentation exercise. If they do not meet these conditions, then you will struggle to target your actions to your chosen group of customers.

Why not take a look at your own segmentation right now and decide how it can be improved? This may be by completing the information you have on each group, or may make you realise that you need a whole new segmentation study. However, it is definitely worth getting target customer choice right, as this forms the foundation for your br ands’ customer centricity.

 

Don’t have the resources? Here’s a solution

If you do not have the time, money, or expertise to run a detailed segmentation study, you can still make an informed decision of thebest  customer group to target. Use an analysis similar to the Boston Matrix, first developed in the 70′s by the BCG. At that time, it was created to help corporations analyse their business units and was based on market growth and relative market share. There are numerous free articles online explaining both the methodology and giving example plots; the one from MindTools is in my opinion one of the better sources.

Boston MatrixWhilst the criteria you use for each axis can vary, this simple method has the advantage of being able to be completed over time, as you get more information. Examples of the criteria that can be used are:

Attractiveness: Segment size, segment growth, segment value, competitive environment, fit to the company or br and
Ability to win: Product attractiveness to your customer, your distribution channels, your media mix, your reputation

Once you have positioned the different segments or groups of customers on the axes, you can easily see what needs to be done for each:

  1. Target: these are your core customers to target, as they are both attractive to the business and easy for the company’s product or service to attract
  2. Convert: these users can be attracted to your product or service but your ability to win them is currently low; you probably need to consider improving one of the elements of the marketing mix to attract them
  3. Grow: your product or service can easily win these groups but perhaps they are not as profitable as you would like; review them from time-to-time or develop a different strategy to attract them
  4. Ignore: many organisations struggle to make the decision NOT to go after a group of category users, but if you have neither the product / service nor the segment size that would be profitable to you, why spend time, money and energy going after them?

Choosing the right group of customers to satisfy with your product or service is essential for business success. So is doing everything you can to underst and them as deeply as possible. Truly customer centric organisations excel at doing both; do you? Why not share your own succcess story on segmentation?

If you would like to  know more about targeting, check out our website: https://www.c3centricity.com/home/underst and

Need help in underst anding and segmenting your current category customers or defining which group to target? Let us help you catalyze your customer centricity; contact us here

This post has been adapted from one that was publised on C3Centricity Dimensions on May 14th 2012

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12 Things you Need to Know about your Target Customers

How well do you know your target customers? I mean really know them? Are they men, women, young, old, Fortune 100 companies, local businesses?

If you can at least answer that, then you have the basics, but how much more could you know about them? Can you answer the following twelve questions?

I was recently working with a local service company who was looking for help with their online presence. They were keen to get more active on social media and had asked for advice about the best platforms, optimal frequency of publishing and possible content ideas.

However they were in for a surprise. Rather than getting straight onto the “sexy” topic of social media, I started by taking them through the basics of target customer identification. Lucky for them that I did! When we had finished the exercise, we had actually found five different targets for them to address, rather than just the two they had been addressing until now. This clearly would have an impact on both where, what and how they communicated online.

Customer persona template
Click image to download the template

These are the twelve questions that enabled us to brainstorm, identify and then complete a better and more complete description of their target customers. Their use also resulted in clear differentiated segments for their services – three more than they had originally thought! How would you like to double your own market potential? Read on:

  1. WHO DEMOGRAPHICS: OK this is usually a “no-brainer” and is how most organisations describe their customers. Not really original and definitely not competitive, but still the essential foundation.
  2. WHAT THEY USE: Whether you are offering a product or service, you need to know what your customers are using today. And not only for your category, but in adjacent categories too. What do they use – if anything – if your product / category is not available?
  3. WHAT THEY CONSUME: Here we need to underst and what types of information and media they are consuming; what do they read, watch, listen to in their spare time. Which social media do they use, what websites do they consult on a regular basis?
  4. WHAT THEY DO: How do your customers spend their time? What type of lifestyle do they have? What are their hobbies? What do they do all day, and in the evening and at weekends?
  5. WHAT THEY BUY: This is where you describe their current category purchasing habits. How frequently and what quantity do they buy? Do they have regular buying habits? Do they do research before buying or repurchasing? Do they compare and if so how, where, why?
  6. WHERE THEY CONSUME: Is the category consumed in home, in work, on vacation? With friends, with their partner, with friends? Are there certain surroundings more conducive to consumption? What makes it so?
  7. WHERE THEY BUY: Do your target customers have certain places and times they buy? Is it an habitual or impulse purchase? Is it seasonal?
  8. WHERE THEY READ: Today “read” covers not just traditional media but new media as well. From where do they get information about products? From manufacturers, friends, family, colleagues? Do they access it online, in print, on radio or TV, at home or on the road? What websites and people do they follow, listen to and value the opinion of? What interests do they have in general and concerning the category?
  9. WHERE THEY SEE: One reason to target a specific group of customers is so that you can better communicate with them. Where are they most likely to be open to your messages, what media, what times, which days?
  10.  WHY VALUES: What values do your customers have that you are meeting with your product or service, and explain why they are using it? Do they have other values that are not currently addressed, either by you or your competitors? Do these values offer the possibility of a differentiated communications platform or product / service concept?
  11.  WHY EMOTIONS: What is the emotional state of your customers when they are considering a purchase or use, both of the category and the br and? Clearly identified emotions enable you to more easily resonate with your customers through empathising with their current situation. You are more likely to propose a solution that will satisfy their need or desire when their emotional state is precisely identified.
  12.  WHY MOTIVATIONS: What motivates the customer to consider, buy and use their category and br and choice? Emotions and motivations are closely linked both to each other and to the customer’s need state. By identifying the need-state you want to address, you will  be better able to underst and your customers and increase the resonance of your communications.

If you can answer all twelve of these questions in detail, then you certainly know your customers intimately. But before you sit back and relax on your laurels, remember that people are constantly changing and what satisfies them today, is unlikely to satisfy them tomorrow. Therefore you need to keep a track on all four layers of your customer description to stay ahead of competition, as well as to satisfy and hopefully delight your customers.

As mentioned above, by answering and completing a detailed description of the target audience for my client, we were able to identify a couple of new segments that their services could address. Although their demographics were similar, their emotional and need states were quite different. This gave us the opportunity to respond with slightly different service offers for each group. 

If you would like to try out this exercise for yourself, we have some useful templates that we can send you, to make it easier and a lot more fun; just drop us a line and ask for them.

For more information on better identifying and underst anding target customers, please check out our website: https://www.c3centricity.com/home/underst and/

C³Centricity uses images from  Dreamstime.com  and  Kozzi.com

10 ways to improve your customer centricity today

Many of you know that customer centricity is essential today. You must put the customer clearly at the heart of your business.

But I also know that many of you struggle because you just don’t know where to start. Am I right? Then this article is for you. 

This week I give you ten simple actions to accelerate your organisation along its path to improved customer centricity. 

 

#1 Review & revise the description of your target audience

Complete this 4W persona template for customer centricityDo all your br ands have a clear description of their target audience? These days we tend to speak about personas.

Is it as complete as it should be? If not, then use our C3Centricity 4W™ Persona Template and complete the who, what, where and why for each one.

Include not only demographics and consumption / purchasing habits but also information about where they do these things, what values they have that you can tap into and what emotions motivate them to use your br and.

 

#2 Assess the optimum way of connecting with your customers

Do you know the best way to contact your target customers, as well as their preferred place and time to connect?

Review how you communicate with your customer and what information exchange there is at that time. Is it one-way or two? Are you in a monologue or a dialogue?

Obviously the second is what it should be. You can learn far more about your customers when they are ready to share their information with you.

 

#3 Identify the needs your br and is addressing

Maslow's hierarchy of needsDo you know what needs your customer has and which of them you are tapping into?

They certainly have more than one need, but you must identify and address only one.

If you attempt to address more than one and especially if they are not sequential, your customer may be getting confused.

Mixed br and messages on what the br and can do for them will leave them perplexed. This will, in turn, reduce the likelihood that they will be convinced your offer can meet their objectives.

Knowing where your br and sits on Maslow’s hierarchy of needs has one additional benefit. It can increase the success of regional and global launches by identifying cultures with similar levels of a specific need.

 

 #4 Make your customer everyone’s responsibility

Is customer care only on the objectives of one or two departments in your organisation? Perhaps it’s only for the care centre employees or merch andisers to do.

It should, in fact, be on everyone’s annual objectives to watch, listen and engage with your customers regularly. This will help them to underst and how their work fits into the company’s objective to satisfy and delight them.

Every employee has a role to play in customer centricity and connecting with the customers on a frequent basis and sharing experiences will ensure that they underst and this.

#5 Plan for the unthinkable

Do you know where your business is going? Do you know what might happen in the future and what you would do in each situation? How would you react to new laws, new customer dem ands, and their new sensitivities such as ecology, sourcing or ingredients?

It is better to plan for such events before they happen, so that you can quickly react to challenges as well as opportunities.

 

#6 Review your business plans for customer centricity

Are your customers clearly identified and described in your plans, as well as the customers of your major competitors? Review your plans by considering how your customers will react to each of your planned actions; not just the outcomes you are hoping for, but a true detailed analysis based upon your underst anding of them and their desires. Have you planned any actions to surprise and delight them, or are you only relying on the “same old” activities, repeated from last year? People get bored quickly and you can actually “train” your customers to expect your actions, which as a result will quickly become less interesting to them. Plan at least one unexpected WOW action each year.

 

#7 Exp and your innovation thinking

Are you blocked in an innovation box, relying on your internal technical and expert skills? If you know your customer well you can offer them more successful innovations, perhaps through additional sensorial experiences. Consider adding sound to taste, colour to services, touch to packaging, aromas to retail displays. Give your customers more reasons to stay with you and they will become more loyal.

 

#8 Stop testing your communications to death

Customer centricity means observing your customersI can feel your shock as you read this, but why not review your process for developing your advertising? If you spent more time and resources reviewing how to connect with your customer, and then reviewed early stage work up-stream with them, you would be more likely to develop winners. It would also reduce or totally replace your usual tests just before airing them, when in most cases it is too late to change anything.

 

#9 Define your image

Your br and has an image but it might not be what you think it is. Make sure you are measuring it regularly and not only on the attributes that you ideally wanted to perform well on. Review and update the attributes used to measure the perceptions of your category with your customers, and ensure you measure what is (also) important to them. The coverage of the total category will likely be more complete and you might even find a new or adapted positioning that no-one else is currently occupying.

 

#10 Update your KPI’s

You know that what gets measured gets managed, well are you measuring what needs managing or only the easy metrics to gather? It you know your customers well, who they are, what they do, what they think of you and your competitors, and then compare these to where you want to take your br and, the metrics you need to be measuring become evident.

 

I hope this list has helped you to define a few areas that need revision in your organisation. Even actioning just one of them will improve your customer centricity. Of course doing them all will ensure that your customer is really at the heart of your business, as well as in the hearts of all your employees.

If you would like to know just how customer centric you are today, why not complete the C³C Evaluator? It will help you to identify where you are today as well as how to prioritise any needed changes in your organisation. Become a C³C Member and you can use the tool for FREE.

For more information on making your organisation more customer centric, please check out all C³Centricity solutions and training at https://www.c3centricity.com/

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