Customer segmentation is nothing new. Marketers have been doing it for years. But nowadays there is so much more data being captured, and making sense of it is the key to optimising performance.
You can’t please all of the people all of the time, but you can delight a good proportion of them. You just need to find out what makes them tick.
To do this you can create a bunch of ‘1% clubs’. Slice off the top one percent of customers in any given area (e.g. by value, or by engagement). Monitor these groups, treat them differently, experiment, and learn from them.
Here are seven ideas to help you get started...
The 1% most engaged
The more engaged a customer is, the more likely they are to buy, share, recommend and remain loyal. As such it is worth knowing who they are. They probably care about your brand more than most, and as such they’re not going to be shy about telling you what they think. They can be very useful for product development, crowdsourcing and cheerleading.
The 1% most responsive
You could file this under ‘engagement’, along with dozens of other things, but it’s worth looking at in isolation. Try to identify why people respond to your campaigns. Email open rates might be largely dependent on delivery times, or subject lines, but are other factors at play?
The 1% most valuable
It goes without saying that these folks should receive special attention. You probably know who a lot of them are already, and you should be trying your hardest to keep them happy. What makes these people tick? What are the common characteristics of your most valuable customers? How did you acquire them? What do they need to stick around? How can you find more customers like them?
The 1% most price insensitive
Not necessarily the most valuable, or the most frequent buyers, but those customers who think nothing of splashing out on the best products. Segment these customers. Create dedicated marketing campaigns for them. Try to figure out how to make them purchase more often.
The 1% most influential
Who are the real power users among your customers? Apple can count many influential people among its customer base. When influencers like Stephen Fry passionately describe products like the iPad as “soul-scorchingly beautiful”, people like me sit up and take notice. Wrap up your influencers in cotton wool and make them feel special.
The 1% most mouthy
It’s a good idea to try to identify those customers who make the most noise (which comes in two flavours: good and bad). These people can help or hurt brands, depending on the decibel level, the frequency of shouting, their connectedness / network, and how borderline crazy they are.
The 1% most unprofitable
Now this one is slightly controversial but I do not believe in ‘customer service neutrality’. Surely the best paying, most profitable, least bothersome customers should attract a higher level of customer service? I’ve heard of firms that actually reduce customer service levels for unprofitable customers, and I think it makes plenty of sense to push these people in the direction of your competitors (how you go about that is your own business).
Creating niche groups can help you understand how to influence wider customer behaviour. Remember to start by benchmarking the absolutes (numbers of customers in any given 1% club, average customer value, satisfaction levels, etc) and define some targets / goals.
I’m sure there are plenty of other ideas along these lines – please leave your own suggestions below.
[Image by Beta-J via Flickr, various rights reserved]