A client’s perspective on segmentation (part 2): how to stop it falling short of the mark
Guest blogger: Jonathan Solomon
We’re delighted to share the second in our series of posts from guest blogger Jonathan Solomon who is an experienced Head of CRM and Insights. Having worked for almost 15 years within the marketing and research teams of Vision Express, Citi Bank and E.ON, Jonathan has a good understanding of how market research can guide business strategy. Here, Jonathan shares his experience with segmentation and discusses how you can stop it from falling short of the mark.
Last week I discussed why segmentation is important, and what you can expect from a client’s perspective. But let’s say you’ve already commissioned a segmentation study – what actions can you take to try and prevent it from falling short of the mark?
1) Marrying soft research data with hard databases
Make sure your Insight and IT departments are involved from the outset. Find out what data points you have, whether you have access to 3rd party data to enrich your current info (for example, Experian). You should let the agency you’re working with know how you are targeting your campaigns and how you are currently running any categorisation (RFV, Mosaic, Acorn etc.).
Knowing this can help your agency to tailor the questionnaire to take advantage of your data (or compensate for the lack of it). It can also help avoid internal politics down the line as you will need your Insight and IT departments’ help if you want to add the segment flag to your database.
2) Respondent anonymity does not help
Standard research practice requires anonymity. Segmentation, however, works best when respondents have their segment flagged on your database. This doesn’t mean that the data collected (personal data, quotes, preferences) cannot remain anonymous. By using unique identifiers for respondents, instead of names and addresses, you can match customers with their segment on your database without compromising the privacy of your data. To comply with the data privacy act you would, however, need to make this very clear to respondents at the start of any data collection.
3) Don’t re-invent the research wheel
Find out what research is already available within your company. Most companies who can afford to consider segmentation will have ongoing quantitative studies (trackers, mystery shoppers) and recent qualitative work. Again this insight can help shape the segmentation study questions. You can also ask for these studies to flag respondents at a segment level (once your study is complete), further embedding the segmentation into the business and helping to ensure it lives and is used.
4) Use current marketing material, propositions, customer journey as a tool within the research
What is your customer journey, what are your company’s major campaigns, and how do these marry with the results of the segmentation study?
With retail especially, you can fall into the trap of conducting research that just looks at the in-store/online experience, totally missing the marketing and advertising that got your customers across the threshold in the first place.
Getting your agency to analyse current marketing materials will not only bring the segmentation results to life in a practical way but it can also open up new possibilities for useful future research such as testing new messages/material created to ensure alignment with your findings.
Finally, from a practical point of view, remember that it’s your agency’s job to make life easy and to make you/your team look good. Two quick wins in this department are…
5) Insist that your agency don’t just send 99 slides full of very detailed analysis
You’re probably going to be presenting this to the board who won’t have time/want to read the detail. They will be expecting a short (2-4 slide) summary of findings and actions, so add this to the front of your presentation.
Therefore, you really need the presentation to cover:
- Segment name, market share (volume and value, at client and market level)
- Individual description of segments – pen portraits
- How are the segments alike and how do they differ?
- How do key competitors compare, what are their holdings by segment?
- How do your company and your competition fair on key statements, who are the winners and losers currently?
Letting your agency know what information you want in advance will help you get the information you need.
6) Great research provides a practical solution to the questions asked
Make sure you ask your agency to identify key actions. You want a research partner who understands your business and your customer base as well as research techniques. If they can provide real actions (and providing existing marketing/advertising material as part of the study will help with this), they will demonstrate their understanding and usefulness and ultimately help show that this was money well spent.
By carrying out as many of these points as possible, you can ensure that your segmentation project is as effective as possible, and has the best chance of being used in the long term throughout your company.
Find out more about the benefits that segmentation can bring: email us at firstname.lastname@example.org