15 Ways to Supercharge Your Business – Week 5
Congratulations to those of you who have come on board with our 15 Ways to Supercharge Your Business Growth programme – we are already a third of the way along our path to learning how to adapt our businesses to the demands of the New Customer Journey.
Last week we zeroed in on the role of intelligent data management as the bedrock of so many vital areas of your business, in particular customer insight and engagement, efficient sales processes, strategic decision-making and maximising growth opportunities. This leads neatly to this week’s theme – data segmentation.
What is segmentation and why is it so important? The process of customer segmentation splits customers into groups based on specific and relevant shared characteristics, such as demographics, location, lifestyle, personality, and behaviour.
By determining the specific needs of each group, businesses can tailor marketing and sales strategies accordingly, thus extracting real value from their data. As Forbes puts it: “You can’t be all things to all buyers. You can, however, be the right solution to a large enough group of buyers to successfully grow your business, if you can implement a smart segmentation strategy.”
So, with this in mind, let’s get straight into our top tips to help you get the most out of segmentation:
- Choose differentiating characteristics to segment customers wisely. The characteristics your company chooses to focus on depend on the type, sector and size of the business. Be aware that the more segments you have, the more time and resources you will need to sort through the data. Multiple segments can make it harder to identify distinguishing features. Carefully select the most important characteristics, remembering that differences cannot be forced or pre-determined.
- Look for patterns. Successful segmentation will pinpoint trends in customer purchasing and contact preferences. These patterns will highlight needs and pain-points, which will help tailor subsequent interactions with the customer to create individual customer journeys and build longer-lasting relationships. If you know from previous feedback that a particular demographic prefers to be contacted by phone after 6pm then surely your sales team are more likely to succeed in their interactions with this group if they stick to this?
- Identify your most profitable customer groups. Are you wasting marketing efforts and resources on customers who are producing little or no return on investment? Through segmentation, groups that produce the most revenue and, therefore, most potential for company growth can be identified. Marketing budgets can then be allocated in a proportional and effective way. Look out for next week’s blog for more insight on how to identify and nurture your most profitable customers.
- Tailor your marketing strategies. Generic marketing is off-putting, especially when customers readily provide you with data that should help you to improve how you communicate to them. In fact, failing to act on data insight tells the customer that you aren’t listening to them or putting their needs at the centre of your business – hardly a good start in what you hope will become a long-term, profitable relationship. When there are significant differences between segments, indicating that they are likely to be more responsive to a particular selection of your products or services, you can start to develop targeted marketing strategies and really show your customers that you have considered their needs and how best to meet them.
- Position your products in relation to target segments. The ultimate goal of segmentation is to align your products and services to each of your target segments, by analysing and having a clear view of your product line’s unique attributes and their key benefits to customers. Only by doing this will you be able to help customers visualise situations where your product or service will fit their requirements and add value to their business.
Analysing your customer base in this way is crucial to understanding (and being able to respond to) the needs and expectations of the twenty-first century, digitally-savvy consumer who prizes their Customer Experience (CX) above almost everything else. According to Gartner, “81% of marketing leaders responsible for customer experience (CX) say their companies will mostly or completely compete on the basis of CX in two years. Yet only 22% say their CX efforts have exceeded customer expectations.” Segmentation will help to ensure your business is among those destined to succeed.
Our Best Practice Guide, which you can access if you sign up to our 15 Ways to Supercharge Your Business Growth programme, will guide you through the full range of benefits successful segmentation brings to your business.
Next week we’ll focus on the practical steps you can take to identify, target and retain your most valuable customers who are at the heart of driving the future growth of your business.