No matter how large and diverse your customer base is, you can be sure your customers all have one trait in common: each one of them is unique. True, singularity may sound like an odd choice for a universal attribute, but consider this: while some marketers haven’t recognized the truth that every customer is unique, you can bet the customer knows it. It’s safe to say that every customer expects to be treated accordingly, as an individual.
This fact is true in the most exclusive high-end brick-and-mortar boutique, and it’s no less true for the online marketer serving large numbers of consumers. Obviously, though, turning that customer experience goal into a reality is a little trickier for the online business.
That’s where customer segmentation analysis comes into play.
How customer segmentation analysis puts the focus on each customer
The concept is straightforward enough. Customer segmentation simply means grouping a portion – or segment – of a company’s customers together based on any number and type of shared attributes. Rather than market as if all customers are created equal, with customer segmentation analysis businesses can sharpen messages for each segment, thereby relating to the members of each group in the way that is most likely to connect with them.
For the customer, that means a more satisfying customer journey. For the business, it means an opportunity to maximize the value of each customer segment – and the lifetime value of each individual customer. That’s critical, because customer segmentation analysis allows marketers to pay special attention to the highest value customers – the ones who determine the success of a business in the long run, as has been famously demonstrated in the 80/20 rule, also known as Pareto’s Principle, which is explored by Dr. Elizabeth Rush Kruger in an article on ManagerWise. That 80/20 distribution has been applied successfully to countless endeavors, but for marketers it has long meant that 20 percent of customers are responsible for 80 percent of sales or profits, a ratio that even has Dr. Kruger arguing that marketers should focus on the 20 percent and forget the rest.
Not every marketer would go that far, but the point certainly illustrates the importance of strategic segmentation analysis. When using an intelligent self-service solution like Nanorep, you can make use of channeling to ensure the right path for your customer, and to see to it that high-value queries are escalated to the right human-assisted channel. This is segmentation and omni-channel service at its best.
Selecting the right variables for your segmentation analysis
Thanks to today’s cutting-edge tech solutions that provide unparalleled customer analytics and customer journey mapping, it’s possible for marketers to slice and dice a company’s customer base into a virtually unlimited range of segments. These can include the most basic ones, such as age, gender, geography, income and education, and other key demographics, as well as crucial information about the customers’ relationship with the business. For example, how frequently do they make a purchase? How recently? What is the total number of purchases they have made? The total revenue and the total profit? How many new customers have they referred?
By digging deeper into the data for increasingly sophisticated segmentation analysis, it’s possible to create ever more precise affinity groups and craft ever more precise messages to reach them – in other words, we can begin to understand what’s unique about those customers.
Benefits beyond marketing
While the benefits of focused marketing messages are clear and compelling, segmentation analysis also pays off throughout the company, from product development to customer service and sales.
With the heightened understanding of how each subset of customers behaves on their customer journeys, what motivates them, and how they respond to specific products, companies can key in on possible quality issues or gaps in their product lines. Similarly, the information gleaned from segmentation analysis can reveal opportunities for upselling or cross-selling, and shift focusing efforts to pursuing the highest quality revenues.
In addition to helping businesses understand their current customers, however, customer segmentation analysis can also be a powerful tool for identifying and targeting new prospects, focusing on people who share the attributes of key segments.
Nanorep’s smart self-service a winning combination with segmentation
Seeing beyond what your customers tell you means you need to listen to their voices. Knowing what they actually think, based on how they interact with your brand, is the key to understanding your customers in a real and meaningful way. Nanorep’s Voice of the Customer analytics gives you a global view of customer voices and frequently unanswered questions.
These robust analytics map out your customers’ concerns and queries in real-time in a visual manner, allowing you to watch trends and follow the ways in which your content is accessed. Beyond the traditional abilities to learn from these analytics and optimize your customer service, you can use VoC to track the ways (and which types of) data is consumed by customers and segment out key demographics. Harnessing the power of AI, Nanorep’s self-service solution can even provide different answers to the same question based on context, understanding of intent, and details of the customer interested in the information. The ability to understand customer needs by segment combines with personalization and sophisticated technology to exponentially improve the customer journey.
Keeping an eye on the big picture as well
Those finely-tuned segments have yet another critically important lesson to offer discerning marketers. They clearly spell out the relative value and impact of each of the segments, definitively showing what percentage of revenues or profits relate back to each group. That provides marketers with valuable intelligence to guide decision-making – and maybe to test out that old 80/20 rule.