Segmentation
Segmentation is used widely in marketing and communication. Applying segmentation principles brings benefits to both existing and potential customers in all sectors. The Segmentation process identifies customer groups by their common interests and their individual characteristics to make their needs and aspirations more easily identifiable.
This insight enables services to be designed and delivered to focus on 'known' customer needs and rather than being a 'one size fits all' approach.
WHY SHOULD WE SEGMENT?
To be able to:
- use resources more efficiently and effectively to meet 'known' customer demands;
- communicate and engage with customers more effectively;
- deliver services designed around customers as individuals or groups of similar aspiration;
- deliver more 'bespoke' solutions – not just applying a generic policy.
WHAT WAYS ARE THERE TO SEGMENT?
What are the characteristics of your customers? Ask the question: 'Who are they?' and 'What do they want?' Think about:
- What do our customers do?
- What are their behaviours?
- What are their activities or interests?
- What type of people are our customers?
- Work through the socio-demographics of your customer base.
- How do our customers think or feel?
- Attitudes
- Needs behaviours and motivations
- What makes them ‘tick’
- Is there anything else 'specific' to our customers?
EXAMPLES AND PRACTICAL APPLICATIONS
Segmentation is used to understand your customers' differences so that services are designed and delivered in a customer focused way. It also helps ensure equality of access to services as the services are designed in line with the 'known' needs and choices of the customers.
Segmentation – does the size of the organisation matter?
No - the principles are the same. Segmentation enables services to be developed and delivered using the knowledge you have of your customers and their differences, with an awareness of their needs. Larger organisations may take a more sophisticated commercial approach while a smaller organisation may rely more on socio-demographic and local factors. The key factor is that any organisation, whatever their size, takes time and care to understand their customers and their differences. This knowledge is then applied into how the services are designed and, ultimately, delivered to the customer.