A lot of companies get customer segmentation wrong. Or they got it right, but they did it seven years ago. The fact is that if you have customer segments that were constructed before February 2020, you probably need to do it again. Things have changed dramatically over the past couple of years, and the customer behavior shared by your customer segments is one of them. 

One of the biggest problems that I see in customer segmentation, besides timeliness, is that the categories do not get into why customers buy. Often organizations choose broad categories to the segments, like how much business they represent to the organization or what type of widget they buy, to group like customers together. 

Segmenting your customers for targeting purposes is essential. This podcast subject was inspired by some interesting stats I read about in the consumer research team Attest’s 2022 US Consumer Trends report  about what different groups of customers want. Many of these stats reveal that different people want the brands they choose to communicate to them in various ways, and often these things are in stark opposition to each other. It makes clear that one message for all your customers delivered one way will be less than effective for your customer strategy.

In this episode, we discuss our 5 rules to effectively target your customers. Starting with a rule that demands you accept change as a constant, we set you on the right course for grouping your customers into meaningful segments that allow you to target them with the right message that encourages them to do what you want in the way that speaks to them best. 

Key Ideas to Improve your Customer Experience

Many times, when I discuss customer segmentation with clients, I learn that they have already done it. Excited to see what they have, I take a look, learning that many of the segments include really relevant information like fax numbers or Myspace handles. Usually, after I ask, I learn that these segments were done years ago. However, if your customer segmentation is older than 24 months, it might as well be from 24 years ago. The world has changed, and your customer segments have, too.

Here are a few key moments in the discussion:

• 03:08  I share some interesting stats from the Attest's 2022 US Consumer Trends report  that create a problem for many marketers and inspired this topic for the podcast.   
• 05:26  We share the first rule about accepting that things change, including your customer segments, so be prepared for it.
• 08:31  We discuss how multiple inputs help create more meaningful grouping than the vague and broad ones we often encounter that do not assist effective targeting.    
• 11:21  Colin explains that it is essential to know what you want the target to do before you segment, which is why he considered making it rule number one.
• 14:06. We explain how customer behavior is the most important and the most neglected of the characteristics used to segment customers.   
• 19:39  We reveal the final rule and Ryan explains that effective segmentation should have four to eight groupings. 

 

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Customer Experience Information & Resources

LinkedIn recognizes Colin Shaw as one of the 'World's Top 150 Business Influencers.' As a result, he has 290,000 followers of his work. Shaw is Founder and CEO of Beyond Philosophy LLC, which helps organizations unlock growth by discovering customers' hidden, unmet needs that drive value ($). The Financial Times selected Beyond Philosophy as one of the best management consultancies for the last four years in a row. Follow Colin on LinkedIn and Twitter.

Click here to learn more about Professor Ryan Hamilton of Emory University. 

Why Customers Buy: As an official "Influencer" on LinkedIn, Colin writes a regular newsletter on all things Customer Experience. Click here to join the other 35,000 subscribers. 

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