Customer segmentation is an interesting topic for many sales- and marketing organizations. And it is a much debated topic which often is handled incorrectly as organizations are trying to put groups of customers in little neat boxes. Here is our take on customer segmentation – finding your Twins.
In our experience most companies fail miserably when it comes to ensuring that their segmentation efforts are directly actionable and can have a positive short term impact on the business.
Traditional segmentation focuses on identifying customer groups based on demographics and attributes such as attitude and psychological profiles. This type of segmentation in most cases is not very useful and the individual fragments of each grouping often have little or nothing in common.
Value-based segmentation, on the other hand, looks at groups of customers in terms of the revenue they generate and the costs of establishing and maintaining relationships with them. For organizations whom have the infrastructure and resources in place to work smarter, decision parameters such as CLV – Customer Lifetime Value and other relevant segmentation parameters such as “likeliness to churn” and “great referral value” may play a part in value-based segmentation. Which is good if you are able to turn theory into practice.
So here is a quick tip for you that may very well have an immediate impact on your sales- and marketing activities. It is not rocket science or open heart surgery, but this tip can work well for any type of sales- or marketing activity. Especially activities designed to give you immediate traction.
Meet the “Find your Twins segmentation”
Twin segmentation is simple. Let me give you an example.
Let’s say that you want to promote a specific product or service which has already been sold to a number of your existing customers. First you identify whom they are and what the common characteristics of anyone whom already have made a purchase of said product are. They might live in a certain area, be of a certain age, belong to a specific industry etc.
Once you have identified these characteristics, you simply find other existing customers with similar characteristics. In other words, the Twins.
You can use similar techniques in your prospecting and lead generation work. Look at common traits of your existing customers and then target your prospecting activities to leads whom match those characteristics.
You will agree this is a simple method for customer segmentation. You may even think “I knew that”. My question is, so why aren’t you using the knowledge you have to apply the Twin segmentation in practice ?