Customer segmentation frameworks don’t have to be complex in order to be effective. Simplicity is often the key
What our approach delivers:
- Simplicity and clarity – Easy to communicate to everyone involved
- A consistent Framework that grows with client sophistication and available data
- Ability to build in Business Unit or Brand-by-Brand flexibility
- Action-oriented top-level Segments to drive changed behaviours of colleagues
- Drill-down levels to enable accurate targeting and personalisation
How our approach works:
- Consistent approach but new solution every time
Our approach begins with understanding the business drivers behind the perceived need for a customer segmentation. It then identifies or proposes all the variables that could play a role in forming the framework. Some will be available immediately and some will be based on data that needs enhancement or even new collection processes.
- Framework can start simple and develop fast
The variables are grouped into meaningful ‘Dimensions’ that can be fixed for the medium to long term. Some of the dimensions will initially contain very few, very simple variables that can potentially grow in richness over time. Every customer can then be allocated a Level or a Score for each Dimension.
- Segments designed for instant understanding
The ultimate segments into which customers will be placed are developed iteratively with the Dimensions. These are formed to enable the type of differentiation that will be relevant to the client’s strategies. They will be given names that are instantly meaningful to colleagues at customer interfaces.
- Segment mix matched to budgets and resources
The business rules and algorithms to translate every single combination of Dimension Levels into a single segment are developed, tested and adjusted. This ensures that the start point distribution of customers across the segments is sensible in terms of resources and budgets available, based on what the proposition is intended to be for each segment.
- Controlled flexibility to ensure relevance
The degree of flexibility that is going to be provided to different business units, regions or brands can then be planned and engineered into the framework. This can be done at whatever level of sophistication that is relevant to the organisation and the skills of the people driving the segmentation.
- Implementation planned right from the outset
Running alongside the development of the framework we would be developing the implementation strategy. This is critically important to the adoption and ultimate success of the segmentation work. The strategy covers everything from the specification of changes to systems to the communication messaging to colleagues, partners and even to customers.