Your Customer Segments Are on the Move!

by Bill Harriss on October 6, 2010

Bill Harriss

Bill Harriss

Marketers have known for years that it is imperative to understand which customers their product or service appeals to. The fact is, many of those traditional, tried-and-true methods of profiling and enhancing customer information in order to gain a more complete, descriptive view of your customers are still valid today. The challenge we often see is that the customer, household and market has fragmented, and often can render traditional, static segments obsolete. New markets are opening up and old markets are dying. Think about the market for Lincoln Town cars vs. newer, smaller vehicles like the Ford Fiesta. iPads, smartphones, etc., are products that didn’t exist even a few years ago. Social media, mobile e-commerce; rapid change is everywhere. In this digital age of global communities, your customer segments are not as strictly defined by demographics, geography and distance as they once were.

Marketing Analytics MythbustersMyth Busting – Strategic Customer Segments Tell the Story

Recently, we worked with a major travel and leisure company on a customer segmentation process so they could learn more about their customers in order to serve them better and increase acquisition and retention rates. By looking at everything from demographics to lifestyle, type of travel, travel frequency and a host of other attributes, we came up with four distinct segments. What was interesting is that our client believed that they had a customer base that looked very different from what the segmentation effort illustrated. In this era of rapid change, many of the old myths about what a customer looks like are often proved false once you let the data highlight the truth. Now armed with this new customer insight, this client could develop the right communications strategies to manage the customer lifecycle based on these different segments.

Dynamic Segmentation – Everything Changes

The other challenge we often see is that marketers fail to build a dynamic segmentation capability. They will go off and conduct some sort of one-time customer segmentation study, but then fail to bring this information back to a place—usually a customer or marketing database—where it can come to life in messaging and customized communications based on these insights. You can develop some sort of targeted communications based on segmentation, but until you attach this information to your individual customers, you will not be able to fully optimize the data elements you need to maintain on your customer database. Acting on these insights in a one-to-one manner will allow marketers to improve the levels of retention and customer growth that will sustain them in good times and bad.

Strategic customer segmentation and profiling are essential foundational elements to any sound targeting strategy. Just make sure they are actionable once you have them in place.

About the Author:

Bill Harris is a Practice Leader in the Healthcare and Consumer Markets for marketing analytics firm SIGMA Marketing Group.  Connect with Bill on , or follow him on .

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