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How to Fast-Start your Customer Centric Journey and Accelerate Ahead of Competition

Many of my clients tell me that they underst and they should be paying more attention to their customers, but admit that they just don’t know where to start when it comes to becoming more customer centric.

I can empathise with them; the task may seem overwhelming at first. After all, it is not something that can be corrected by just starting a new project or taking a single action. It dem ands consistent effort over the longterm, to make an organisation truly customer centric. Here are a few of the ideas I give them at the start of their journey, taken from my latest book Winning Customer Centricity, now available in Hardback, Paperback and eBook formats on Amazon, andnoble.com/w/winning-customer-centricity-denyse-drummond-dunn/1121802409?ean=9782970099802″ target=”_blank”>Barnes and andnoble.com/w/winning-customer-centricity-denyse-drummond-dunn/1121802409?ean=9782970099802″ target=”_blank”> Noble,  iBook and in all good bookstores.

As I am often quoted as saying:

“Customer Centricity is a Journey and not a Destination(>>and%20not%20a%20Destination%22%20%20[tweetlink]%20%23CRX%20%23Quote” target=”_blank” rel=”nofollow”>Tweet this<<)

So where do you start?

The first action to take when turning around a product or service-based company is to start by thinking about how your organisation is currently working. What is its structure and what processes are used to develop your offers? It is only by underst anding how your company functions, that you can identify the priority changes that need to be made. Therefore these are the first five things I suggest to do when starting on your own journey to improved customer centricity:

1. Identify a C-suite sponsor

Customers on the board with c-suiteEvery project needs a sponsor, but when it involves a major culture change, it must be sponsored at the very top, ideally by the CEO. (>>Tweet this<<) If this is not possible, the most customer – savvy executive should be the sponsor, whether that is the CMO or the SVP of marketing services or customer insight.

The initiative must be recognised as a priority company objective by everyone in the organisation, so the higher the level of the project sponsor is, the better it will be.

2. Make every employee aware of the priority initiative

Once you have a senior sponsor, the next step is to make everyone aware of the initiative. It always amazes me how many departmental projects go unnoticed by other groups within the same organisation. (>>Tweet this<<) In my consulting practice, I often uncover overlapping projects when I am invited to work with a client on a project. Perhaps this is because I work across departments and therefore don’t suffer from the silo effect impacting most employees. I also have the privilege of being able to ask “silly questions” which of course are never redundant.

In order to make all employees aware of the project, it must be mentioned at every opportunity. This means signing your emails with a suitable quote such as:

“We don’t pay your salaries, our customers do, every time they buy our product” (>>Tweet this<<)

or

“There may be customers without br ands, but there are no br ands without customers” (>>ands%2C%20but%20there%20are%20no%20br ands%20without%20customers%22%20%20[tweetlink]%20%23Customers%20%23Br ands” target=”_blank” rel=”nofollow”>Tweet this<<)

You can also mention it in newsletters, on bulletin boards, or through internal memos, with clear explanations as to why it is important and how everyone is expected to participate. This alone will make the project st and out from the tens if not hundreds of other projects in your organization, which are most likely driven by a single department or group.

3. Identify your categories

Identify the category you are in This may seem strange to be asked to evaluate the categories in which you are active, but I am always surprised how many companies identify the category from a manufacturers perspective and not that of their customer. (>>Tweet this<<) For example a carbonated fruit juice could be seen by customers as being a part of carbonated soft drinks, of fruit juices, or in a completely new category of its own. It all depends on how they consume it.

Another example might be a dried soup mix, which customers may use to make soup, but also to make a sauce, to add taste to a casserole or dip, or to enhance the flavour of a dish made from scratch with fresh ingredients. In each case, the soup mix would be competing with products in those different categories, such as sauce mixes, flavour enhancers, and not just other (dried) soups.

4. Identify the category users

As you can imagine, if your product is being categorised in different product segments by consumers, then the users themselves will most likely differ. Taking the above example of dried soups, the category user might be:

  • Young singles – using the product to make a quick and easy soup
  • Mothers of teenage children – to make their sauces more flavourful
  • Couples – to add to their scratch cooking recipes

In each case the group of consumers have differing needs and therefore different segment descriptions. This is why underst anding the category in which you are active and the customers of the sub-group that you are appealing to, is a vital first step to underst anding your customers. (>>anding%20the%20category%20%26%20customers%20of%20the%20sub-group%20you%20are%20appealing%20to%2C%20is%20a%20vital%20first%20step%20[tweetlink]%20%23Customer%20%23Underst anding” target=”_blank” rel=”nofollow”>Tweet this<<)

5. Choose your category segment

Choose your customer segmentAgain taking dried soups as our example, the description of your users will be very different depending upon how they use the product. The simple demographic breaks mentioned above would be insufficient to be able to get to know them well. The more descriptions you can add to these basic demographics, the more likely you are to underst and and therefore delight your customers. (>>and%20your%20customers.%20[tweetlink]%20%23Customer%20%23Personas%20″ target=”_blank” rel=”nofollow”>Tweet this<<)

In C³Centricity we use the 4W™ Template to identify and store everything we know about category users. For more information on this useful template, see the post and-underst and-your-customers/” target=”_blank”>How well do you know your customers? or the Video series on YouTube. You can also download the free template in the Members area.

These are the first five actions to take when starting out on your own journey to increased customer centricity. Getting the whole company and every employee in it, behind such an initiative, is the only way to make it happen. As Tony Hsieh, CEO of Zappos is often quoted as saying:

“We believe that customer service shouldn’t be just a department; it should be the entire company”

Your customer centric journey starts with these first steps, and then it’s just a matter of knowing intimately the people you are hoping to satisfy and delight, and ideally surprise too. Have you already started your journey to Customer Centricity? If so, what has been your biggest challenge to date,  and if you solved the issue, how did you do it? Others who are just starting on their journey would love to hear from you.

Winning Customer Centricity BookThis post has been inspired by the first chapters of Winning Customer Centricity and includes images from the same book. You can buy it in Hardback, Paperback or EBook format in the members area, where you will usually find a discount code. It is also available on Amazon, andnoble.com/w/winning-customer-centricity-denyse-drummond-dunn/1121802409?ean=9782970099802″ target=”_blank”>Barnes and Noble, iBook and all good bookstores. If you prefer an Audiobook version, or even integrated with Kindle with Amazon’s new Whispersync service, you’ll have to be patient a little longer.

8 Marketing Essentials for 2014

Over the past few weeks I’ve been in the US catching up with a few C³Centricity partners about marketing priorities for 2014. The meetings were as inspirational as the new products being presented at the Las Vegas CES (Global Consumer Electronics & Consumer Technology Tradeshow)!

We discussed some of the most important challenges marketing will be facing in 2014 and brainstormed some possible solutions. If you are having any of these difficulties then I’m sure you will find the following ideas useful:

Social Media Metrics

Email is a popular customer service connection pointAs many companies transfer budget from traditional to online advertising, it is essential to also shift some of your funds to measuring its impact, even if some people do question the validity of such metrics. However, the most important thing to do is to link the metrics to what is happening in your business. Your CEO isn’t interested in how many Facebook Likes you’ve managed to get, but he is interested in knowing that you gained x% in awareness. Some st andard numbers often followed are mentioned in “ 10 Social Media Measurement Best Practices” but remember that engagement and listening for better customer underst anding are also (more?) important, as mentioned in this Business Insider post. What everyone does agree, is that every campaign must have objectives and metrics to gauge their efficacy; do yours?

Storytelling

There is so much (too much?) information flowing into organisations today, but it is not being sufficiently accessed because most of it is not being integrated and analysed. Even when it is, sharing the insights is often a challenge because of the complexity of the process. Turning knowledge and underst anding into stories and then visualising or videoing them is a better way for both sharing and getting participation in actioning them. Why not review both your insight development and your knowledge sharing processes this year? If you’re comfortable with where you are, perhaps now is a good time to start storing your information and insights in easily-accessible libraries?

Showrooming & Virtual Reality

Virtual realityIt has been suggested that showrooming will be the end of retail outlets, but I believe there will be an integrated, rather than an either / or future. Virtual reality enables shoppers to see how products could be used, or how they would look in their homes, office or even on themselves. It also allows both retailers and manufacturers to improve their offer by identifying any pain points, and enables them to hold less stock and still offer maximum choice to customers. How about going online with 3D catalogues or providing in-store areas to offer your customers product trial and experience?

 

New Communication Opportunities

According to Jay Walker-Smith of Yankelovich

“We’ve gone from being exposed to about 500 ads a day back in the 1970s to as many as 5,000 a day today.”

Whether that second number should be 5,000 or 20,000 as I’ve also heard mentioned, it suggests that little can or is being retained our customers. Since this is unlikely to change in the future, as attention spans shorten even more, finding new messaging opportunities that resonate with our customers is vital. Why not use social media to track your target audience’s expressed wants and needs, and then compare them to what your key competitors are communicating. This will help you to uncover hidden communications’ gaps which you can then use to connect with your customers.

Adapting Communications to Personas

Don't alienate your business from its customersAre you dissatisfied with your current segmentation efforts? Creating personas can already add interest and thus actionability, by visualising their similarities and differences. Have you thought of taking the same approach to your communications too? By crafting personas built from your existing data on media habits and going beyond traditional segmentation, you can focus your attention on how to actually communicate with these different groups.

Channel Management

Mapping your br and’s story as told by the br and across channels can provide a “mosaic” of its communications and quickly highlight areas which need attention.Successful campaigns work across multiple channels but it is important to examine the contribution of each to avoid overlaps and gaps. Why not make 2014 your year of br and building through improved channel management?

Better Communications for Organisational Strategy

Following on from the above point, people’s attention spans are diminishing and we are all skimming rather than reading today. This means that companies need shorter, more impactful copy, for advertising and websites, but also for internal newsletters and communications. Analysing the content of communications can be very informative in underst anding the messages our customers, employees or consumers are receiving. We can no longer be satisfied with knowing just what we are sending out. Make this year the one in which all your communications resonate and provide the right messages to your targets.

Disruptive Innovation

Trends around the worldCustomers are becoming more and more dem anding – no news there! They don’t stay satisfied or surprised for long. What was novel yesterday is normal today and boring tomorrow. I suppose that’s why shows such as CES get so much air-time on local, national and even international media. We all love to dream and imagine a better life just around the corner. The same goes for our customers, who are always open to new and better propositions.   What are you doing to meet these increasing dem ands? Is your innovation linear, exponential or disruptive? If it’s not the second and hopefully the third, you are probably missing out. Why not make 2014 the year you disrupt your innovation process?

These were eight of the tens of ideas that I discussed with my partners to help companies identify their marketing priorities. Have a look at your plans and see whether you are still playing it safe by just repeating what you did last year? The same number of campaigns, the same promotions, even the same type of innovations. There’s still time to make 2014 the year of exponential growth and change for your company. 

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

C³Centricity uses images from  Dreamstime.com  and  Kozzi.com

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

What the Hospitality Industry can teach us all about Customer Service

One of the industries most sensitive to customer service errors is hospitality. If they get something wrong their clients will tell them immediately.

This is a great opportunity, since it gives them the chance to respond appropriately and save their reputation. However, it also means that they have had to adapt to being not just reactive but also proactive.

If you would like to see what you can learn from how they meet some of these challenges read on.

This past week I was in Miami and had the chance to visit and stay in various hotels both at the beach as well as in the financial district. With a presentation to give in January on the hospitality industry (more about that next month), I wanted to get some true-life stories from the people on the ground. Their comments and ideas were so inspiring, I thought it would be useful for us all to consider some of their solutions, even if we are not in the hospitality industry. Their businesses depend on excellent customer service; shouldn’t ours as well?

#1. Know your client

They all spoke about the importance of knowing whom they are serving. Are their guests on business or vacation? These two groups have very different needs and dem ands, and so it is vital that the purpose of their visit is clearly understood in order to better serve them.

Ask yourself: These hotels start with a simple two cluster analysis and then group each of these into subgroups. What does your own segmentation tell you? Is it too complex to be actionable? Would a simpler approach such as the one these hotels are using help? Check our website for more about customer targeting and segmentation.

#2. Imagine the clients’ needs before they ask

Another interesting similarity between these professionals is their pride in underst anding their clients’ needs. They actually feel that they haven’t done their best if a client has to ask for something.

Ask yourself: Are you continually updating your knowledge about your customers’ changing needs in order to anticipate them? If you develop a process to satisfy them but don’t adapt with each new learning, then you risk losing a deeper underst anding. More about this topic here.

#3. The buck stops with the person listening

The banquet manager at one of the hotels talked about the importance of representing the Hotel to ensure the clients’ needs are met. He said that telling a client that something is not his job / responsibility is unacceptable. Whomever the client is speaking with is the company (hotel in this case) (>>Click to Tweet<<) from his perspective, so the employee cannot just pass responsibility to someone else to get rid of the issue.

Ask yourself: Do clients get passed from one person to the other when they call your company? Does everyone underst and that it is their responsibility to find a solution to each client’s issue? They should only transfer them to someone else to resolve the client’s problem, once they have established that this is the right person to solve it. Read the 5 steps to customer care excellence for an example of simplified contact management.

#4. Speak to the decision maker

Another topic the banqueting manager mentioned was to always speak to the decision maker, not (only) the person making an order. For example, if it’s a wedding he speaks to the bride directly, not just the groom or the parents, even if they are the ones paying.

Ask yourself: Do you underst and the purchase decision journey of your clients? If the end user and purchaser are different people, you will need to underst and them both; (>>Click to Tweet<<) their reasons for using / buying the product they choose and how they came to make that decision.

#5. Your checklist is the start not the end

Most hotel departments now work with checklists, just like pilots. Whether it is reservations, the room cleaning, or meeting management, these lists have been built up over time to ensure that nothing essential is forgotten. However, if your customer service experts are still working to scripts, then their connection will seem false and uncaring in the eyes of your customer.

Ask yourself:Are all your scripts, processes and checklists absolutely necessary? Could you give your employees more responsibility and freedom to satisfy your customers? If you are concerned that they may take too many liberties and initiatives, you could set limits, such as decisions that cost less than a certain limit. As your confidence in their decision-making ability grows, you can increase this limit. And this makes good business sense. In Temkin’s 2012 Employee Engagement Benchmark Study, they found that highly engaged employees are more committed to helping their companies succeed.

If you work in the hospitality industry I would love to hear your comments and ideas on the above. Would you add any other points? If you work in a different industry, I hope these comments inspire you to make your own customer services more caring and that the questions posed make you think about what we can learn from this industry that is not called hospitality for nothing. Shouldn’t we all be in a hospitable business?

Would you like to know just how customer centric you really are? Complete the C3Centricity Evaluator (it’s FREE to C3Centricity Members) and receive a summary report with suggested actions to take.

For more ideas about how to put your customer at the heart of your own business, please check out our website here: https://www.c3centricity.com/home/engage

How to segment for marketing success

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.

This is not an easy thing to accept, but is essential for successful marketing. It may even sound counter-intuitive, but segmentation is the only way to ensure you have the best possible chance of satisfying the needs of your target audience. 

 

Where to start

When deciding who to target, most companies will start by conducting some sort of analysis. This could be as simple as identifying your users by what you observe, such as young men or large families, or as complex as looking to appeal to those who value freedom and are looking for br ands that can provide or suggest this dream, which would come from a values and motivational segmentation. As mentioned last week in the post entitled “Are you targeting the right customers?“, the deeper the underst anding of your target customer is, the more likely it is to provide you with a competitive advantage.

 

The MIDAS touch

Whatever method you use for segmenting and choosing your target customers, the results of your exercise of customer grouping needs 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 clusterings will fulfil these five key conditions, so it is easy for you to evaluate the segmentation you are currently using to see if it is valid and robust enough. If it does not meet these conditions, then you will struggle to activate it and target your actions to your chosen group of customers.

Since underst anding your target as completely as possible is vital to the success of the business, I would suggest you review your own segmentation and decide how it can be improved. This may mean simply completing the information you have on each group, or may mean having to run a whole new segmentation exercise. However, it is definitely worth getting your segmentation and target customer choice right, as this forms the foundation for your br ands’ customer centricity.

 

A solution if you don’t have the resources for this

Boston Matrix for segmentation evaluationIf you do not have the time, money, or expertise to run a detailed segmentation study, you can still make an informed decision based on simple criteria, and then using an analysis similar to the Boston Matrix, first developed in the 70′s by the Boston Consulting Group. At the time it was created to help corporations analyse their business units and was based on market growth and relative market share. Today this scatter plot is used with various elements combined to make up the two axes. Whilst 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. Maintain: these are your core users as they are both attractive to the business and easy for the company’s product or service to attract them, so they need to be protected from competitors’ attacks
  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 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, as is doing everything you can to underst and them as deeply as possible. Truly customer centric organisations excel at doing this; 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 segmenting your current category customers or defining which group to target? Let us help catalyze your customer centricity; contact us here

This post is an adaptation of one that was publised on C3Centricity Dimensions on December 8th 2011

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Essentials of Segmentation and some Simple Alternatives

All br ands and services need to choose a group of customers that they are going to satisfy, since it is impossible to satisfy everyone most of the time. This means that you need to make a choice and agree to ignore some of the category users you could appeal to, in order to totally satisfy your target customer.

Although this may sound counter-intuitive, segmentation is the only way to ensure you have the best possible chance to satisfy the needs of your targeted customers. 

 

Where to start

When deciding who to target, most companies conduct some sort of analysis. This can be as simple as identifying your users by what you observe, such as young men, or large families, or as complex as looking to appeal to those who value freedom and are looking for br ands that can provide or suggest this dream, which would come from a values and motivational segmentation. As already discussed in an earlier post on the 3 Rules of Effective Targeting, the deeper the underst anding of your target customer is, the more likely it is to provide you with a competitive advantage.

 

The MIDAS touch

Whatever method you use for segmenting and choosing your target customers, the results of your exercise of customer grouping needs 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 clusterings will fulfil these five key conditions, so it is easy for you to evaluate the segmentation you are currently using to see if it is valid and robust enough. If it does not meet these conditions, then you will struggle to activate it and target your actions to your chosen group of customers.

Since underst anding your target as completely as possible is vital to the success of the business, I would suggest you review your own segmentation and decide how it can be improved. This may mean simply completing the information you have on each group, or may mean having to run a whole new segmentation exercise. However, it is definitely worth getting your segmentation and target customer choice right, as this forms the foundation for your br ands’ customer centricity.

 

A solution if you don’t have the time or money to do this

If you do not have the time, money, or expertise to run a detailed segmentation study, you can still make an informed decision based on simple criteria, and using an analysis similar to the Boston Matrix, first developed in the 70’s by the Boston Consulting Group. At the time it was created to help corporations analyse their business units and was based on market growth and relative market share. Today this scatter plot is used with various elements combined to make up the two axes. Whilst 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. Maintain: these are your core users as they are both attractive to the business and easy for the company’s product or service to attract them, so they need to be protected from competitors’ attacks
  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 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 attract with your product or service is essential for business success, as is doing everything you can to underst and them as deeply as possible. Truly customer centric organisations excel at doing this; do you?

Need help in segmenting and identifying your target customers? Let us help you catalyse your customer centricity; contact us hereor check out our website: https://www.c3centricity.com/home/engage/

 C³Centricity uses images from Dreamstime.com

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