What are the most effective customer segments for personalization?

Segmenting customers fosters relationships and uncovers their interests, enabling personalized interactions and better understanding.

I believe the personalization has taken centerstage than customer segmentation. In my experience, segmentation has to be based on the common interests, common journeys that will help personalization make it easy to serve clients effectively.

Segmentar os clientes pode ser útil para entregar experiências excepcionais e personalizadas para os clientes com diferentes valores para a organização. Saber quais clientes tem menor e maior impacto na sustentação do negócio é crucial para que a empresa tome as decisões mais assertivas na entrega dessa experiência, focando os seus esforços, investimentos e ações na satisfação, aumento do LTV, Share of Wallet e redução do Custo de Servir do Cliente.

Lots of guidance out there already on why it helps customers (and the bottom line) if they’re appropriately segmented, but I’d like to look at it from the employee perspective. A good segmentation strategy helps align an employees skills to specific business and customer needs, and provides an enriching environment for all parties. A clear segmentation strategy also informs development and attainment, by providing clear data points- which in turn drive progression and other growth opportunities (and lowering turnover, which is bad for all parties).

Sorting your customers into segments can have multiple benefits. You can sort your customers into defined experiential segments (ex."go-getters", "procrastinators", "tech-averse") to help you figure out how to create customer experience solutions (FAQs, chatbots, templates) that cover the needs of a majority of segments. Once you have your segments, personalization within those segments becomes much easier and more relevant.

Creating segments require collection of data from every customer touch point, be it from any channel and in any form and then streamlining that data to extract required information. RFM model is one of the most common and widely used segmentation tool which stands for Recency, Frequency and Monetary Model where customers are segmented into a) how recently they have made a purchase b) how frequently they make a purchase and c) of what value they have made a purchase. Organizations need to send a benchmark for each and then segments their customers accordingly.

Creating customer segments is like throwing a memorable party. By analyzing data on demographics, behaviors, psychographics, and technographics, businesses can organize their customer base based on age, location, gender, style, interests, playlist, and tech corner. Personalized invitations and targeted messages can make each segment feel like VIP guests, creating a unique atmosphere. Data-driven segmentation can lead to a successful marketing party where every customer feels like the life of the party.

Consolidating data is key to getting value from a segment and delivering great customer experience. Being able to identify segments within a system which is integrated into the delivery tools (email, social, text...) is essential for automation. customer data platforms can be a great tool for this.

It depends on how you're looking to segment your customers, but a combination of qualitative and quantitative data is necessary. If you're trying to determine your highest-value customers, for example, you'll want to start with financial data from your CRM or billing systems. Starting with the qualitative is a great and simpler place to start. That way, when you're determining a more qualitative segment like Behavioral Segments, you can measure those segments to see which Behavior Segments your high-value customers fall into, for example.

Demographics are limiting in this context. Look at user journeys and needs. If you have a 25 step E2E process but your users only use parts of it, group your users based on the part of the journey they use. You may also have super users (use 2 or more parts of the process), administrators, or champions of your tool. Then look at frequency of individual use (once a day/once a year?) and also volume of use (process step 1 used 20k times a day Vs process step 25 used 3 times a day). You can then determine where the greatest value could be felt sooner. Now, how many drop outs do you have? Where in the process do they occur? Why is this happening? Select the problems your users are experiencing now over stakeholder goals.

Personalization nowadays is a given every customer expects from you, it is not a nice to have anymore. In order to create an optimized segmentation you need to collect data from all touchpoints, organize the information and make it structured, store it and analyze it. Based in your criterias, that ofthen include RFM, LTV and other performance indicators, you can create as many segments as you want but, to be sure you really listen to your customer, you we should go beyond transactional and basic relational information and do not leave aside: contacts with your support or care team, interactions and comments in Social Media, chatbot conversations, surveys, reviews or ratings to mention some. And never stop improving the experience!

The best way to start personalizing brand interactions for a segment, or for individuals, is with data and visibility - your data systems (financial, experiential, and analytics datasets) need to talk to each other. If a marketing manager can look at the financial and analytics data for a segment, it'll be that much easier to create personalized journeys for those segments because the data tells you what they value. For CX teams, merged datasets that tell a customer's story are CRITICAL to success, because no customer wants to have to give agents information that they know you have somewhere else but agents don't have access to because it's siloed.

Incorporating personalization is a key strategy to empower customers with a sense of ownership and value. This approach not only contributes to retaining loyal customers but also plays a crucial role in engaging at-risk and potential customers.

Strongly believe that personalization make the customer feel valued and it is the human tendency that when they are made to feel important and understood they stay for long and stick with the brand. With personalization one can also assess the potential modification required in the product or service in the future to stay competitive in the market.

In today’s day and age of widespread technology and AI-generated content it’s so important to have that personal touch of humanity. It will have your customers feel heard and valued because it shows that you are paying attention to what they are saying and doing. And if you can combine personalization with the customer-centric approach while supporting them or helping solve their concerns, it will generate loyalty for your service or product and will lead to higher retention. This will show your customers that you don’t only see them as $$$, but as a long-term partner and have their back.

A segmentação de clientes é essencial para direcionar a estratégia do negócio visando potencializar a entrega de valor para cada um. Logo, a segmentação dos clientes favorecerá a criação de produtos, serviços e ofertas específicas para cada público garantindo a melhor experiência.

Segmentation is the pathway to deeper levels of Personalisation.   For example, businesses can create segments based on customers' age, income level, geographic location, or buying habits. This allows them to create targeted marketing campaigns and personalized experiences that resonate with specific groups of customers.   From Coca Cola marketing strategy, personalisation is one of the most unique marketing concepts they have ever come up with. The personalisation of packages helped Coca-Cola gain a good number of customers. By personalising the packages with customers' names on the bottles, they noticed a rise in sales of products.

Personalization doesn't have to be complicated, and it doesn't have to happen all at once. Including a customer's name in communications is a start. Teaching your systems and people to remember and reference past purchases and behaviors is another. Build your levels of personalization with intent that fits your overall customer-base by doing the work of segmentation first.

The most effective customer segments for personalization depend on the customer journey stage: Awareness: Goal - turn strangers into prospects - Demographic - Affinity (lifestyle, passion or habits) Consideration: Goal - turn prospects into leads - Life events (i.e. graduating from college, getting married) - In-market for specific products Action: Goal - convert leads to customers - Similar audiences - Remarketing Loyalty: Goal - drive CX loyalty - Products upsell/cross-sell - Transactions - Digital interactions - Modeled segments - Profile/preferences Any Stage: - Location - Customer match - Custom audience - Behavioral These are the common ways to segment audiences for personalization throughout each stage of the customer journey.

The journey of personalization and customer segmentation may be a process that unfolds over time, driven by customer feedback, continuous iterations, and evolving preferences. While it requires dedication, the process becomes enjoyable when fueled by a genuine passion for the product. When you love your product, navigating through these steps feels like a piece of cake. The outcome is a product that is truly customer-centric, addressing pain points, and capable of elevating the customer experience to new heights. In this journey, the sky is the limit!

Once you understand what segmentation is and which methods to use to create segments that differentiate you from your competitors you will find that the biggest challenge is not yet met. The biggest challenge with any segmentation model (and more especially the really good ones) is implementation and embedding. This is where the real segmentation practitioners are seen. How do you get the segmentation model into your own customer data. How do you deliver those really cool, customized value propositions only to the applicable segment. This is where the rubber hits the road and real value is created for customers and stakeholders. The real segmentation practitioners understand this process and what it takes to get it done