Customer experience reveals segmentation limits

By applying a little customer experience scrutiny to traditional segmentation models we see their limitations. Being more empathetic with real people rather than grouping customers with similar profiles helps turn successful short-term activity into a differentiated, more profitable and sustainable business.

When creating a segment there is by definition an assumption that we can find round pegs to put in the round holes we make.  We profile customers into a group that allow us to predict that they will respond in the same way to the same messages. They have similar behaviours, similar lifestyles, similar needs.  And, by and large, that approach works – but it could be so much better.

The principles of customer segmentation have been the bedrock of marketing activity for decades. They are used to design new customer experiences and spawned an industry where sales leads are now created scientifically by analysing vast amounts of data in the name of customer lifetime value.

The problem is therefore two-fold. On the one hand, traditional approaches to segmentation risk retaining an inward-looking business-centricity around one question: “How can we sell more?”.  Secondly, segmentation models are easy to replicate by competitors and are therefore not driving the differentiated and better experiences that are key to business survival.

That step, to move beyond the same segmentation principles as our competitors requires a different perspective;  that of the customer experience and therefore – not surprisingly – the customer.

Whichever segment a customer falls into, and let’s remember while reading this that we’re all people and we’re all customers, it is irrelevant when we’re dealing with a company.  What matters to me as a customer is that I get done what I need to quickly, easily and in a way that makes me feel I would do it all again if I had to.

Today, it’s much less about how many kids I have, which postcode I live in, whether I run my own business, what products I’ve bought previously or how I spend my spare time.

As people we all have life going on around us when we interact with a business.  It is the one small window a company has to make the right impression.  I’ve worked in and with large corporates where there is (sometimes unintentionally) a real belief that the customer’s life revolves around them.

There are over 525,000 minutes in a year. More than half a million of them.  And with many companies we do business with, they are only getting a handful of the most precious of commodities that we possess.  As customer we want to make the most of them, get things sorted when we need to and move on.  By their actions, the impression many businesses give is that customers are never far away, that customers will amble into their world, drift around their processes and then tell everyone how great it was.  That’s not the real intention but that’s often how it feels.

How do we move things on from a business driven by segmentation to one that thrives by giving the right experience?  One way to really understand what it’s like to be a customer is to (get the CEO to) become a customer and stress-test those experiences and show what it can really be like. For example:

• Go without sleep for 24 hours then try and buy your product or ask a question. You’ll soon find out how easy things really are
• Five minutes before an important meeting ask someone to look for the number and make a ‘quick’ call to your own business with what should be a straight-forward query
• Ask someone, or put yourself in the mindset of someone, who has depression, recently had a close family bereavement or struggles to comprehend instructions and feel the impact of unempathetic employees, processes that treat people like widgets or a myopic quest to close the sale at all costs
• Walk into one of your stores knowing that you’ve only got a couple of minutes left on your parking ticket, tell the employee and see what happens
• Try to use your products and services while sat on your own in a wheelchair.  Then try it with a blindfold on or one arm tied behind your back.
• Give each of the directors a task that a customer might do and make them do it irrespective of their schedule within the next 24 hours – it’s only what we as customers have to do.

I wrote recently about how companies can learn from those with physical or mental disabilities.  Organisations will see a benefit in all their customer experiences and therefore commercial results by stretching the thinking to understand better the world of customers who have, or care for those who have, disabilities.

It’s the same here.  Some scenarios may rarely happen but the point is that taking a genuine customer perspective and building experiences, processes and communications around that rather than limited segmentation models, experiences that work at the margins will be brilliant at the core.  It shows where the weaknesses are and where opportunities for making the right changes lie.

The insights that get flushed out help bring the reality of what customers experience to life for those who need to see and hear it. A great example I came across recently was a customer experience lead who wanted to drive the message home about the difference between what the brand promised and the appalling wait times in the contact centre.  Her Executive meeting started then immediately and to the surprise of all present was put ‘on hold’.  She played a recording of the music customers hear for the average time they hear it when they try to call to buy, or need help.  Uncomfortable? Yes.  Brave? Absolutely.  Impactful? Without question.  And in the kind of scenarios we’ve talked about here, even more effective at inspiring change.

It’s a bit like shooting for the stars if you want to get to the moon.  Segmentation will take a business so far.  But building experiences based on genuine empathy will ensure that when customers need you most, or simply they interact on a routine basis, there’s a much greater chance that the way it’s done will keep them coming back and telling others to do the same.  And that’s what it’s all about.

If you’d like to know more about this or any other strategic or tactical aspect of customer experience do please get in touch – I’m on +44 (0) 7917 718 072 or email [email protected].  My background is as a CX practitioner in the corporate world.  That’s the foundation for me being an empathetic customer experience consultant.  I also run workshops and speak about customer experience at events across Europe.  I’m a Certified Customer Experience Professional and a judge at the UK Customer Experience Awards.

Thank you, I hope you found the post interesting and thought-provoking, and please feel free to get in touch or add your own views below.

Jerry Angrave, CCXP