Capability: Customer Segmentation
Identity Resolution, customer segmentation, and real-time multi-channel communication tools have the ability to surprise and delight water customers in the UK. What can be learnt from the success of other sectors?
The dreaded “Beast from the East” of February and March 2018 left over 200,000 consumers in England and Wales with little or no water and resulted in OFWAT releasing their “Out in the Cold” report – measures and requirements to prevent something like this from ever happening again.
Then, Covid hit. When whispers of a distant virus first circulated in the UK, I don’t think anyone truly anticipated just how serious it would be. Over a year into it, everyone is still trying to make sense of the changing consumer habits and how household and non-household consumption will change moving forward. Regardless of anyone’s opinions on how the future might look, one thing is clear – demand is high.
If you’re not familiar with the nuances of demand forecasting or operations for the water sector, you may be thinking “well of course demand is high, everyone is at home”. However, the consequences of this are much more far reaching – from consumers completely changing peak usage as a result of later waking times due to mass non-commuting, to children not being at school during an unseasonably hot Spring in 2020, causing paddling pools to be filled across the nation. This caused a big headache for many departments within the water sector – such as diverting water supplies to meet demand for those at the extremes of reservoir distance, adjusting pressure times for household consumption, and massive concerns about the size of pipes being too small to deliver the demand of water at peak times.
One thing was clear, water companies needed to ask consumers to consider how much water they were using. Nothing as extreme as a hose pipe ban was required (yet)…but considering not filling up your paddling pool every day, not having a bath every evening because you’re in lockdown or reconsidering whether the car needs to be washed every. single. day.
CACI is in the fortuitous position where we work across multiple sectors with the sole focus of enabling organisations to “do amazing things with data”. So, what can the water sector learn from other sectors to enhance their communication with their own customers – not only improving engagement, but ensuring consumers are contacted in channels that appeal to them.
If I was the Director of Customer Engagement at a water company, what would I do?
By following the four below points you’ll be enabling your organisation to trust that you’re speaking to the right customer, with messages that resonate with them, via the right channel.
MAKE SURE MY CUSTOMER DATA IS IN ORDER
If I look at myself, I have multiple email addresses, my surname is frequently misspelt (thanks Rob Brydon), I have two mobile phones with different numbers, even my postal address frequently appears incorrect on certain address look-up providers, which means I’m sometimes on edge as to which of the three incorrect addresses my parcel will be sent to (thank god I live in a little village with a local postie)! Data can get messy. With customer data stored in disparate databases, customer engagement/customer services are often the teams that get the brunt of customer frustration.
Typically, you’ll find a customer who’s disgruntled needing to phone a call centre to complain, to then be asked for their non-sensical account number (which often needs to be found on a letter or via an online account – a whole other kettle of fish trying to log in there), to then be directed to a different team, to then be put on hold. It’s a sure way to reduce C-SAT scores and irritate your customers – probably escalating that complaint and making it harder to resolve.
Now, imagine a world where you can link all customer data and ensure that it’s correct. So, if a customer phones into a call centre with a complaint you’re able to quickly and effectively go to one customer record, with all their contact history. That would improve their experience immediately!
The ability to connect online and offline data in real-time already exists. So, this problem could be a distant memory. Read all about it here.
BE PREPARED IN AN EMERGENCY
If the past has shown anything, having the ability to communicate to customers in real-time across channels is vitally important. The great news? There is already tonnes of technology out there to enable you to do this. Imagine the water supply is being cut off in an area due to a burst main. Well how about if you could:
- Immediately send out a text or email to all residents affected
- Provide them an update once the issue has been resolved and direct them to an information hub if they need any further details
- Send them a letter/email 7 days later apologising for the disruption and informing them of customer service information should there be any further problems.
That’s just in an emergency, imagine if you could set up customer journeys for all sorts of other reasons, e.g planned engineering works, hose pipe bans etc – rather than the typical letter consumers receive.
All this technology exists in the market already and is used very successfully for marketing campaigns. The utilities sector is pretty unique in the requirement to contact customers in these situations – why not take advantage of this powerful technology?
MAKE SURE YOU HAVE THE TOOLS TO COMMUNICATE THROUGH CHANNELS THAT APPEAL TO THEM
Emergency communication is one thing, but consumers are expecting you to provide them with interesting content. We’re already working with lots of water companies to understand financially vulnerable customers and providing the tools to inform them of social eligibility tariffs, for example, but a key area is understanding what channels a consumer is going to respond to, and having the campaign tools in house to deliver this content.
Customer journeys are used widely within sectors such as auto, retail and leisure – there is no reason why the water sector shouldn’t also embrace this to drive engagement (and increase the C-MEX and C-SAT scores).
David Sealey from CACI, interviewed Gareth Ballard from Braze in April last year, and it’s definitely worth a watch if you’re looking to form human connections with your customers.
MAKE SURE I REALLY UNDERSTAND MY CUSTOMERS AND THEIR NEEDS
We talk about this all the time at CACI – segmentation is our bread and butter. I can’t re-iterate enough – understanding your customers is so important. How would you feel if you received a letter asking you to stop watering your garden so much in a lockdown when you’re in the top floor flat in 30 degrees with no access to outside space? Not great.
Trying to encourage behavioural change can be supported further when we add attitudinal information to a rich demographic segmentation. Lessons can be learnt from EDF’s Smart Meter Roll Out programme, where CACI built out attitudes to understand the drivers for people to get a smart meter, and then built an integrated communication journey to encourage change.
How could this work for the water sector? Well, perhaps something like the below:
- Creative One (Environmental Families): Content around family activities to encourage water saving.
- Creative Two (Frugal Flat Owners): Content around the money individuals can save around the home by engaging with their water provider, e.g free toilet flushing water savers + a water meter
- Creative Three (Nosey Neighbours): Use demand metrics to say how much water a neighbourhood is using vs another within the area – or simply provide a number of free water saving equipment delivered within the area to encourage uptake.
Does any of this resonate? I’m very happy to talk you through any of the above as part of an Art of the Possible session and bring in Subject Matter Experts to really drive forward your customer experience. Just get in touch and I can set up a 45-minute session with you today.
Covid has brought unprecedented changes to our day to day lives and our behaviour. This in turn is having a huge impact on the charity sector and their ability to fundraise, a vital part of their operations. Some of these key challenges that charities are facing currently are:
- Not being able to host fundraising events
- Loss of income from mass participation events
- Charity shops being closed
- Lower footfall on high streets and transport hubs
- Economic impacts on income
At CACI we have been exploring the impact of Covid on people’s behaviour and we took a look at what this meant for charities and how they can overcome these challenges.
CHANGED PRIORITIES
One of the more unusual impacts in people’s changed behaviour is the up-turn in their priorities when engaging with brands. Whilst Covid-19 safety measures have risen to be the number one priority, regardless of demographics, this was not the only change to the ranking. With a reduction in spending resulting from lockdown, two key aspects have risen to the fore in people’s priorities:
- Ethics of Brands
- Sustainability/Green
This is a key factor for charities as it shows that despite the hardships that many of the population is currently facing, there is a general desire to ensure money spent is done so with ethical and sustainable brands. This is particularly key for charities that have online stores as there is clearly an appetite for this kind of spending, so it is imperative to be reaching out to supporters with this message.
FINANCIAL SITUATIONS
Consideration of changes in income and financial status is imperative, but whilst Covid is having an impact on all, the effect of this is not the same across the board.
Using CACI’s Fresco segmentation, we have been able to look at survey respondents changed financial situations. The groups that are seeing an increased disposable income tend to be some of the younger segments that are early in their careers and have been able to successfully work from home. This is a key group to look at, as they aren’t the typical audience for charities to target as they usually have low levels of disposable income.
DIGITAL ADOPTERS
With face to face fundraising coming to an abrupt stop back in March, digital channels messaging for brand awareness and fundraising initiatives became a key strategy overnight. Since lockdown was imposed, we have seen that 53% of people are now expecting to engage more online. Breaking this down further, we can see that 23% will look to make online a priority going forwards, whereas 35% will only use online over physical when absolutely essential.
What is most important to consider in these statistics, is that it is older generations, typically adverse to using digital channels, that have now become more digitally savvy and more comfortable making payments online. As a key demographic for many charities, this is a key consideration in future fundraising strategy.
THE FUTURE OF FACE TO FACE FUNDRAISING
As restrictions have been eased and the tier system has been implemented, we have seen a rise in movement in the local community – whilst people are not moving in the same way that they were before lockdown, we can see that people are moving about and interacting more in their local community. This is key to consider when planning face to face fundraising strategies as the local high street is a more powerful location than before.
DISCUSSION
One of the key themes that was discussed is the importance in using data to understand what is changing in charity audiences. Whilst there have been some obvious changes with the loss of face to face fundraising and community events being cancelled or postponed, some of the changes in supporter behaviour are more subtle and being able to understand and react to these is crucial.
Some of the other key discussion points were:
- Many charities are seeing an increase in digital donations – it’s key to understand who these donors are an ensure their retention and more importantly to continue to engage them.
- Older donors are getting help from younger family members to donate online.
- Direct mail and DRTV are proving successful – people are responding to the needs of charities, but data is needed to understand who and why.
- Using value exchange and digital campaigns to attract a younger base of new supporters.
- At this point in the year, looking forwards is essential – what does a fundraising strategy look like in 2021 with the lingering effects of lockdown and the tier system in place?
- Improve online retail to recoup losses from retail spaces.
- Retention of donors will be key for stability moving forwards.
- Some charities have already started looking at younger demographics that have more disposable income than previously and engagement strategies here.
- An unexpected bonus is that Covid has given space for internal transformative changes to come about quickly – for example, removing the reliance on particular channels such as face to face.
WHAT’S NEXT?
If any of these points resonate, and if you’d like to understand more about how CACI can support your charity to overcome this challenging time through data, marketing technology and insight please do not hesitate to get in touch.
Look out for our next blog on how charities can find and support the new vulnerable.
Understanding demand is a key challenge for the water industry as it is a stepping stone in helping solve several puzzles such as distribution, understanding leakage, and helping customers reduce their water use. With some areas of the UK having low meter penetration, and standard meters only being read annually or even less frequently; demographic data is a key aspect in modelling demand to meet these challenges.
Recently, CACI ran a roundtable discussion on all things demand to understand how companies are tackling demand forecasting currently, and what innovations are being explored for the future. We ran the roundtable in conjunction with Anglian Water to share the work they are currently doing in this area, and Badger Meter who were part of the winning team at the recent “Innovate East” Hackathon.
USING DATA TO UNDERSTAND DEMAND – ADAM GRAY, ANGLIAN WATER
Anglian Water is one of the largest geographic water regions, spanning the East of England from Grimsby to Basildon. Unusually, Anglian has a 90% penetration of meters across their region.
One of the biggest challenges currently facing Anglian Water, as one of the driest areas in the UK, is climate change. The increased risk of drought and predicted reduction in rainfall for the region is a huge concern for the demand of water.
Another major challenge that Anglian is tackling is the continually increasing population growth in the area. Located to the north and east of London, Anglian Water’s region contains 3 of the 5 fastest growing towns in England – Peterborough, Cambridge, and Milton Keynes. This means that in some areas the population could grow by more than 28% by 2045, again causing a huge increase in water demand.
To help tackle these challenges, it’s important to accurately understand the level of demand and therefore be able to calculate and tackle leakage in the area. To do this, Anglian use three main work streams:
- First, the survey of domestic consumption (SodCon) for which Anglian has 2,000 domestic customers on flow meters, collecting data every 15 minutes. CACI’s geodemographic segmentation Acorn is used to ensure a representative sample of customers have the flow meters.
- Secondly, for customers that are metered annually, Acorn is applied in conjunction with CACI’s Household Occupancy data to calculate the average daily consumption.
- Thirdly, Anglian has approximately 17,000 customers on smart meters which collect hourly data. Acorn is applied to this data to again sort them into cohorts to build corresponding models.
The importance of smart meters in an area that is being increasingly challenged in terms of demand cannot be understated. Anglian has a programme in place to get 70% of their customers upgraded to smart meters by 2030, in order to further improve their understanding of how customers use water and plan for future local demand. Acorn will again be used in supporting the build of these models and to help quantify the day-to-day demand in areas that aren’t smart metered.
In addition, the smart meter data is a game-changer in terms of the understanding, modelling and reporting of leakage in a way that Anglian hasn’t been able to do before.
HELPING CUSTOMER SAVE WATER (AND MONEY) – ANNA CRISP, ANGLIAN WATER AND MICHAEL DAVIES, BADGER METER
At the beginning of September, Anglian Water along with Welsh Water and SES Water hosted the event ‘Innovate East’ – a two-week event focussed on innovation in the water industry. As part of the event, a data hack was held to explore what insights and actions could be driven from smart meter data.
The hack had the challenge statement of ‘Helping customers save water (and money)’ and teams were given Anglian’s smart meter data, along with occupancy data and CACI’s Household Acorn data to find innovative ways to approach and answer the challenge.
Using the above statement on the level of water reduction that is being targeted, Michael and the team approached this challenge with the focus on reducing customers waste use of water.
The first step in their approach was to answer the question – what is considered to be ‘excess use’? The team took raw data from a two-person household to look at an average day’s typical water use. From this, they were able to match behaviours to peaks on the graph as can be seen in the image below.
You can see that the activities with high levels of consumption, but low levels of frequency, can be identified as water being wasted and are the activities that are key to target to reduce water use.
By understanding the different ‘excess use’ patterns of different Acorn groups, this information can then be used to create personalised communications to customers to help them better understand their waste habits and to encourage them to consider alternative options. For example, being able to suggest a variable flush to reduce excessive water being used by toilet systems.
The team then proposed an app, ‘Pipedream’, to demonstrate how this would work. Using best practice from the energy industry as a guide, customers would be able to download the app and visualise their daily consumption against a set reduction target. The team also proposed adding options to demonstrate the change in water usage when different activities were chosen. For example, what happens to their water use if they decide to switch to baths instead of showers. This can then link into a reward scheme to encourage users in better water saving habits.
HOW ARE WATER COMPANIES APPROACHING THE CHALLENGE OF DEMAND MODELLING AND INNOVATION?
The roundtables also included discussion from representatives from other water companies sharing their views, examples of best practice and innovative ideas for future approaches to reducing consumption.
Points raised ranged from the importance of understanding the potentially contradictory view that larger households are naturally more water efficient than single person households (and how this can lead to flaws in using Per Capita Consumption (PCC) rather than Per Household Consumption (PHC) in demand calculations), to examples of how quality and timely communications have been proven to reduce water use.
Naturally conversations turned to Covid 19 and the clear evidence of changing behaviours and local demand, and potential ways in which this can be modelled and evidenced.
WHAT’S NEXT?
Look out for our next roundtable in the series which will be focussed on understanding the impact that Covid has had on financial vulnerability in the water sector.
Please do not hesitate to get in touch should you want to hear more!
APIs are not new news; they’ve been around for 20 years and have grown exponentially.
From powering ecommerce, social platforms and Cloud applications they have become ubiquitous since the explosion of smart phones. They improve integration and automation, leading to better services and innovation, saving time and money – linking both internal and external systems.
With 83% of respondents to The State of API Integration Report 2020 believing API integration is now a critical part of their strategy and 43% seeing a direct increase in revenue it is clear that this is the direction of travel for most organisations.
Added to this, the desire for most brands to provide a more personalised and seamless experience to their customers with 66% of consumers stating that content, that is not personalised, would stop them from making a purchase, real-time information is more important than ever.
To facilitate these real time business requirements, we have made our suite of demographic products available via our API, enabling organisations to access real-time insight about their customers directly into their marketing tech, consumer databases or websites.
The API enables you to code up new customer records instantaneously for immediate onboarding as well as providing insight across digital applications for content personalisation and messaging. With our API you will have the ability to improve business decision-making and user experience whilst achieving personalisation at scale.
THE BENEFITS OF A REAL-TIME API
CACI have taken the Acorn, Ocean and Fresco data products and made them available via our real time API. This allows for the coding of an individual instantaneously, and can change the use cases and application of the products. Here are just some of the benefits our clients are experiencing with CACI’s Demographic Data API.
– Immediate onboarding
Many organisations use CACI’s data products such as Ocean, Acorn and Fresco to plan the customer journey a new customer will follow as they onboard them. Understanding your audience’s affluence, lifestage, and lifestyle can make a big difference when creating tailored messaging and customer engagement strategies, by providing a view of the products your customer may be interested in, in the future. It is particularly important to get this right during the onboarding process as getting it wrong can affect the way a new customer perceives your organisation.
Knowing this additional insight at the start of the relationship can be immensely helpful, from knowing whether they are a Rising Metropolitan who may be interested in getting on the property ladder to an Asset Rich Grey who is planning for life enhancing expenditure or saving for their grandchildren, messaging can be adapted accordingly.
Similarly, if you are a leisure organisation, you might want to understand which shows your customers might be interested in attending in the future; adding CACI’s data can provide the insight you need to predict this while you build up a picture of their transaction habits.
– Siloed data
Another benefit of using the API is that it can assist organisations with myriads of siloed legacy systems containing customer information. It can be complex and expensive to pull data that is sitting on a marketing database, using the API can be a quick and efficient way to provide marketeers access to key pieces of information that drive their marketing communications programmes.
– Website and Email Personalisation
Identifying customers when they appear on your website enables you to serve tailored page content immediately, based on customer characteristics. Adding insight to a customer or prospect in a logged in environment or when they enter their postcode on a web form, enables instant journey planning and content personalisation.
For example, on a grocer’s website, a Successful Surbubs family will be looking for different products than someone who falls into the Student Life Group. Adding this colour to individuals, means that you can personalise content and create appropriate digital journeys which are dynamically adapted as they browse.
– Geo location
Additionally, at the point of placing a home delivery order, appending the geo location of the property can immediately assist in planning the delivery logistics, as well as helping drivers identify properties when on route, especially when it is dark or they are delivering in rural locations.
– Quote journey analytics
A number of our clients are interested in understanding the types of customers who drop out of the funnel during the quote process, compared to those that go on to convert. By adding key demographic, lifestyle or your own segment information to a record as it goes through the quote process, enables you to improve the effectiveness of your digital journey planning. Understanding whether a prospect might need additional reassurance or if they are more likely to be driven by price could affect the conversion path each customer follows.
– Providing insight to sales, customer service or chatbots
We also support our clients with bespoke APIs. For example, one organisation has a bespoke API system built by CACI, which provides real time insight to their inbound call handling teams for both sales and customer service applications, This allows for tailored scripts to be followed dependent on the customer segment.
With studies showing that it is likely 85% of customer interactions will be handled without a human in the future, providing demographic information in real time can provide different routes for chatbots to follow.
BEGIN YOUR REAL-TIME DATA JOURNEY
With the world moving to more automated ways of dealing with data and consumers expecting things to happen in real time, being able to understand your customers or prospects immediately can make a huge difference to the customer journey, maximising the revenue opportunities available to you.
You can discover more about CACI’s suite of consumer data products here, or to speak to one of our data experts and gain a better understanding of how you can integrate these products in real-time with your CRM system, websites and call centres, please get in touch.
Covid-19 has meant that 2020 has been a challenging year for all sectors. With a lack of historical data to forward forecast the impact on consumers and their behaviour, there is no way to know what impact this will have on regulatory and business objectives.
For the water sector, this has been particularly challenging. Water companies have spent years building demand and leakage models to ensure that they are as accurate as possible. With a significant shift in working patterns and individuals furloughed, working from home or made redundant; household consumption has increased dramatically, with a significant drop in non-household use.
On top of this, the UK saw a record breaking dry and sunny spring across the UK, quickly following the wettest February on record – adding further complicating factors to demand models.
Furthermore, UKWIR are working with the water sector to develop a strategy to “achieve zero customers in water poverty by 2030”. With more customers at risk of becoming financially vulnerable, especially with the furlough scheme due to end this month nd further redundancies on the horizon, understanding which customers are at risk and how you can protect them is more important than ever.
Recently, CACI ran a roundtable to explore this latter point in detail and discuss how water companies can understand vulnerable customers and address water poverty.
We addressed this in 4 key areas:
- Understanding those that are at risk of becoming financially vulnerable, pre-Covid
- Using CACI’s movement of people reports to understand who is moving vs pre-Covid levels
- Understanding how this movement compares to demographic groups
- What water companies are doing to support vulnerable customers
UNDERSTANDING THOSE THAT ARE AT RISK OF BECOMING FINANCIALLY VULNERABLE, PRE-COVID
In January, CACI released Vulnerability Indicators to support organisations in understanding customers who are at risk of vulnerability from a financial and digital perspective. The purpose of these indicators is to ensure that organisations are supporting those on lower incomes with appropriate tariffs and ensuring that those that can’t (or won’t) access services digitally are able to access services.
The Financial Indicators include the below attributes, as well as a combined score:
- Basic Bank Account
- Disposable Income
- Young Dependents
- Financial Situation
- Likely to Borrow
- Minimum Payments on Credit Card
- Equivalised Income
- Has a Loan
- No Savings or Investments
- No Pension
- Distance to Bank Branch
The Digital Indicators include (as well as a combined score):
- Broadband Access/Speed
- Does not Have Mobile
- Does not Buy Online
- Does not Use Internet
- Online Finance
- “Computers Confuse Me”
USING CACI’S MOVEMENT OF PEOPLE DATA TO UNDERSTAND WHO IS MOVING VS PRE-COVID LEVELS
CACI has been running regular research surveys to a nationally representative sample on an ongoing basis, to see how consumer behaviour is changing. In terms of the latest movement, this is currently sitting at around 74% of pre-Covid movement, with decreased movement following the introduction of the tiered system in the UK:
UNDERSTANDING HOW THIS MOVEMENT COMPARES TO DEMOGRAPHIC GROUPS
When comparing this to Acorn Demographics, movement is highly correlated to affluence, as you can see from this chart below. During Peak Lockdown the lower affluence groups were moving more than the national average (the black line in the chart below). These groups are highly correlated to those working in the “essential” category, such as Care Workers and Retail Workers:
Compared to the more affluent, who were moving less frequently than the national average (the black line). This is highly correlated to those that are “Office Workers” so are more likely to be able to work easily from home:
In addition, when we compliment this further with the research we are running, we can see that although the number of those on furlough is reducing, 33% of those on furlough believe they are at risk of losing their job, with 25% of people having less disposable income vs pre-pandemic:
WHAT WATER COMPANIES ARE DOING TO SUPPORT VULNERABLE CUSTOMERS
During the roundtable, we discussed a number of key areas that the attendees are focused on, to support customers:
- A desire to be more proactive, rather than reactive and use data intelligently to understand those that are at risk. Some organisations are already using demographic, behavioural and contact centre data to understand vulnerable customers and how to support them – others are struggling to make sense of a very busy data world.
- Consider partnering with organisations where consumers may go if they have not been financially vulnerable before. Linking with organisations such as Citizens Advice is a good place to start.
- Some organisations where data is not easy to access are looking to partner with other utility companies to present a united front for consumers to access support.
- Using additional channels such as Social Media and Press Releases partnered with National Debtline is a good way to reach audiences who may be at risk of becoming vulnerable in the future.
- Also using direct channels such as pro-active emails to promote PSR and alternative ways to pay so you’re directly speaking to all customers (you can of course personalise this using CACI’s segmentations!)
WHAT’S NEXT?
Our next blog will be focussed on the impact of Covid on demand forecasting, following a recent roundtable we ran with Anglian Water and Badger Meter.
Following our next Roundtable on “Identifying the New Wave of Vulnerability” we’ll be releasing the key thoughts and findings.
Please do not hesitate to get in touch should you want to hear more!
So, you’ve delivered a brilliant customer segmentation. You’ve incorporated demographics, lifestyle, engagement and value data, established real clarity and for the first time you can tell your organisation who your customers are, where they are, what they like, what differentiates them, what they want and how you can most effectively engage them.
Now there’s some new challenges – how do you turn this rich new insight into action that drives tangible business value? Equally importantly, how do you get the buy in and engagement from stakeholders and colleagues needed to get the organisational adoption that will make your segmentation a genuine strategic asset?
These are certainly challenges that I have faced on numerous occasions and one I know many marketers, analysts and data leads will recognise.
BUILDING A STRATEGIC ASSET
Typically, a great segmentation can deliver strategic benefits across 3 core areas. I like to break them down as:
- Better Effectiveness – such as selling more through optimised marketing activity
- Improved Efficiency – for example, deducing costs through channel optimisation
- Reduced Risk – such as identifying and puting action in place to support vulnerable customers
Often the business case for the segmentation will have defined goals in theses areas. If not, now is the time to get those use cases defined. Once you have them you will be in a much stronger place to deliver value.
It can take time though to achieve success, so getting moving quickly is important. Once you have them, what’s next?
DATA SCIENCE IN ACTION
This is where getting the data scientists involved can really start to add value. This is often a great place to initiate a collaborative effort with them – you’ve got the opportunity and they have the wizardry to help make it happen.
There are a range of approaches that can work here, but taking the example of a commercial organisation aiming to sell more product to existing customers, we’ve seen the following work incredibly effectively.
In this example, the vision is to combine the customer segmentation you have created with dynamic models that will create an optimised platform for selection and conversion. This approach would ensure that each customer is targeted appropriately with the product most likely to deliver long term value growth.
- Step 1 – Leverage insights and learnings from your Customer Segmentation to inform tailored messaging. Making your content relevant always makes a difference.
- Step 2 – Overlay optimised Next Best Product, Channel Preference and Lifetime Value models to inform targeted product offers. Don’t just focus on what a customer might buy next, consider what will build long term, incremental value.
- Step 3 – Test and refine in a small pilot, be prepared to fail, to learn and improve. It’s rare to get it right first time.
- Step 4 – Deliver measurable, incremental uplift in product holdings through an integrated programme of optimised communications, founded on the Segmentation and enhanced with Data Science – initiating a cycle, of testing, refining and improvement. It may take a little time, but it will deliver significant results.
In this example this activity combines to inform the delivery of a cross channel marketing programme that will drive ROI from increased sales. We’ve seen this work in multiple sectors, including Financial Services, Retail, Automotive and Media. It is also highly effective in driving positive behavioural change in Public Sector applications.
MAKING IT HAPPEN
The key principle is to test and learn in focussed pilots, to enable the timely realisation of insights that will inform you before you move to a full roll out.
In our experience the approach achieves buy-in demonstrating tangible results, building exec level appetite, growing stakeholder confidence and informing the business case for further investment. It will create success stories that will inform the vision and demonstrate success to the organisation. Your customer segmentation will become the foundation of a transformational initiative.
And that’s a key learning I have taken from my time working with customer segmentation. They are great initiatives and often create the most impact when they are used as an enabler to driving significant business value.
If you’d like to hear more about this or how CACI can help you deliver more from your Customer Segmentation, we’d love to talk. Get in touch at info@caci.co.uk.