8 steps toward sales growth using market segmentation
by Kari Mastropasqua
Big data and analytics has become a primary concern for Australia’s best businesses.
The trouble is, it’s never been more complex to segment data and predict behaviour in order to cross and up sell, acquire and retain customers.
But there is simplicity to be found in the complex with a systematic approach.
These best practice steps for data driven segmentation will help make sure even small projects can transform entire companies on the road to bigger market share.
Define your purpose
This basic step often gets muddled in all the concerns and issues facing the company. Your purpose defines which segments you want to acquire more of, retain, and /or exit from.
Organise your information
Think through the level of segments required to be effective. Articulate what is needed to define the segments for the insights required. Then, do you have the skills required to build and measure?
Define your outcome with the right people
No matter what your project is, this will be a team effort. Get the right people in the room to determine what success looks like.
The right people can answer questions like:
- How are you going to measure profitability?
- What new customer issues can you expect?
- What is your desired customer churn?
You can see you’ll likely need a technical specialist; a product executive; the customer support representative all on your project team.
Define customer lifecycle needs
You can better decide what information should be sought in your segmentation project if you understand what your customer needs from you at different times of their life.
Define your data framework
Typically you don’t create more than 10 segments. This makes sure your segments are measurable and actionable. Ask yourself what information you need to make sense of these groups.
Define where you’ll get your information
The power of segmentation lies in the analysis. You will often have to go beyond your in-house data to find the patterns in customer decision making and behaviour. How and where can you find out your customers’ media consumption habits and what influences them? Is it social media insights you need? Is it third-party attitude data?
Describe segments in detail to drive common language
Companies are transformed with customer specifics. There’s real power in simplicity. Company language changes also impact the segmentation. The approach is more sophisticated. Success is palpable as sales and customer service can say, “my ideal customers are these types of people, who transact in these locations, using our services this many times a year,” and so on.
Review and measure segments against defined strategic objectives
We know measurement is often minimal throughout a project. It’s sometimes even avoided. It can be risky to find out something we did not predict and have to change path. But investment here gives you more power.
With technology moving so fast and the marketplace ever changing, it is the fundamental customer understanding that will assist you to get more customers, keep them and grow your business with them.
Kari Mastropasqua, is the General Manager for Analytics at Equifax. Kari commands a team to enable clients to be customer centric through data and analytics.