By Sean Ashcroft
NO TWO customers or clients are the same, which is why a templated approach to business can never work – any more than a one-size-fits-all strategy would work in one’s dealings with family, friends and colleagues.
To become more effective in identifying and serving the needs of your customers or clients it’s important to segment your target audience into smaller groups.
Customer segmentation: 1. Understand what makes customers tick
Andrew Gerrard, of UK communications agency InTouch Marketing, says segmenting a market “helps you develop a deeper understanding of clients and customers, and discover what makes them tick”.
In turn, this means your communications with customers will be more targeted, relevant and effective.
Audiences are segmented by type, with the most typical categories being:
-Spending patterns
-Gender
-Location
-Age
-Socio-economic group.
Customer segmentation: 2. Understanding buying behaviour
“What’s important are those differences that actually affect buying behaviour,” says Gerrard. “What makes each person buy? If you run a hairdressing salon, for example, the type of offers you make to customer groups would differ along gender and age lines.
“For a mail order business, you’re better analysing buying patterns, and split customers into groups according to how much they spend, how often they buy or what products they are most interested in.”
Customer segmentation: 3. A customer segmentation checklist
The following is a customer segmentation checklist, as published by Marketing Donut, a joint venture business resource set up by Google and the Royal Mail.
1. Who do we want to talk to?
-Customers
-Lapsed customers
-Potential customers
2. What do we know about these groups?
-Name
-Address
-Phone number, email address
-Purchase history
-Profitability
-Contact history
3. Where do we hold this information?
4. How up to date is it?
5. Does it comply with data protection rules?
6. Have we checked telephone and fax preference service?
7. Are email addresses opt-in?
8. What is the buying history of customers? Are they:
-Big spenders
-Specialist buyers
-Occasional shoppers
-Old customers.
9. Have we segmented customers into different types?
10. Have we developed profiles of each type of customer?
11. Is our marketing communication targeted?
12. Are there some easy wins?
13. In cold contact what is our response rate?
14. What is our conversion rate?
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Customer segmentation: a checklist
13/07/2010
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