Customer Segmentation

Copyright © 2017 IQbusiness
Customer
Segmentation

Copyright © 2017 IQbusinessCopyright © 2017 IQbusiness 2
INDEX
Introduction to IQbusiness
Segmentation
Customer Needs Led Segmentation Approach
Benefits
Questions
1
2
3
4
5

WHO WE ARE
IQbusiness is the leading independent management
consulting firm in South Africa
• Founded in 1998
• 600+ consultants
• Presence on four continents
• Two offices in South Africa
Our team helps businesses grow by solving problems and
finding new and better ways of doing things.
3

WHAT WE DO
4
We are redefining management consulting to be more responsive to the
challenges our clients face. Our flexible approach includes:
• Capacity and capability
building
• Multi-disciplined teams
• Sustainable solution
- by market
- by industry
- by function
• Staff augmentation
• Contract resources
• Subject matter experts
CONSULTING RESEARCH CONTRACTING
• Methodologies
• Benchmarks and best
practices
• Surveys and data analytics

Copyright © 2017 IQbusinessCopyright © 2017 IQbusiness 5Copyright © 2017 IQbusiness
TRADITIONAL
SEGMENTATION

SEGMENTATION
6
What is it?
• Traditionally a marketing tool
• An approach to dividing your current and potential customer base into similar groupings
(segments), in order to create more targeted messages
• Similarities can be based on characteristics such as demographics, behavior, lifestyles,
interests, needs, etc.

SEGMENTATION
7
Why do we do it?
To Identify the types of customers we want to do business with, i.e.
• Customers that will give us a high return
• Customers that we know how to engage with
• Customers that require the products and services that we have

CURRENT SEGMENTATION APPROACHES
1. How does your organisation
currently segment customers?
2. Is your organisation’s
segmentation aligned to your
customer experience
initiatives?
8
?
?
?

CHALLENGES
There are so many ways in which to segment…. But demographics are the
easiest and most often used characteristic
• Demographics are not a proxy for customer needs
• Segments are still fairly homogenous, and don’t support sufficient personalisation
Although Marketing and Sales efforts are aligned to a segment, the rest of the
value chain is often misaligned
• Disconnect in the customer journey resulting in dissatisfied customers down the line
Changing the segmentation model can have a significant organisational impact
• People and organisation structure, existing client relationships, processes, data, MI,
marketing…
9

CUSTOMER NEEDS LED
SEGMENTATION

CUSTOMER NEEDS ALIGNMENT
11
?
?
?
Make it Enjoyable
Make it Easy
Meet the Need
Dr E Sanders

OUR APPROACH
12
Guiding Principles
1. Customer needs before circumstances
2. Insights from human interaction (employee and
customer feedback before data analytics
3. Strategic selection over ‘all things to all
customers’
4. End-to-end alignment throughout the value
chain over siloed efforts
5. Co-creation and participative engagement over
prescriptive best practice
6. Minimial client disruption through iterative and
incremental implementation over big bang

FROM NEED TO SEGMENTATION
1
Identify
Customer
Types
2
Prioritise
Customer
Types
6
Understand
Preferred
channel &
engagement
model (per
customer type)
5
Define
Customer
Lifecycle* (per
customer type)
Awareness
Buy in
Acquisition
Customisation
Use
Share
7
Group Similar
Customer
Types to form
new segments
8
Evaluate
Operating Model
and other
implications
4
Collate
Needs Info
and enrich
data
3
Define
Successful
Customer
Outcomes and
Real Needs*
* Using CEMMethod™
from the BP Group

DEFINING CUSTOMER NEEDS
14
SuccessfulCustomerOutcomeCanvas
CEMMethod™

DEFINING THE CUSTOMER LIFECYCLE
15
START
1. AWARENESS:
How does the customer become aware of the
need? How is it triggered?
2. BUY IN:
How does the customer become engaged with
your product or service? How do they know it is
for them?
3. ACQUISITION:
What are the steps to actually purchasing the
product or service?
4. CUSTOMISATION:
How is the product or service aligned to this
customer (after the purchase)?
5. USE:
What are the interactions necessary in using the
product or service?
6. SHARE:
How can the customer spread the word?
The cycle repeats and matures. Awareness is also a
continual process, through the media, friends,
family, work, social networks. Are you building
awareness into all interactions?CEMMethod™

CHANNEL PREFERENCE & MATURITY
16TIME
CXMATURITY
Traditional
Customers rely on
traditional channels
and interactions—
but even then, they
leave digital traces.
Experimental
Customers selectively
engage in digital for
utility value,
discovering how the
experience improves.
Transitional
Customers strive to
leverage digital more
broadly, but may not
always be able to do
so.
Digital Savvy
Customers make
digital technology
part of all dimensions
in their lives—mobile
access is key.
1
2
3
4
CEMMethod™

BENEFITS

BENEFITS OF CUSTOMER NEEDS LED
SEGMENTATION
18
Better Customer
Insights1
Fully Aligned
Organisation2
Efficient and Effective
Delivery3
Increased Revenue6
Reduced Operating
Costs5
Improved Customer
Experience4

QUESTIONS

OUR CLIENTS
20

Johannesburg
Physical Address:
IQ Business Park
3, Third Avenue
Rivonia
Gauteng
South Africa
T: +27 11 259 4000
F: +27 11 259 4111
E: info@iqbusiness.net
Cape Town
Physical Address:
The Vineyards Office Estate
99 Jip de Jager
Welgemoed
Cape Town
South Africa
T: +27 21 461 9797
F: +27 21 461 9794
E: info@iqbusiness.net
For further information on this material, please contact:
Lizette Akker
Phone : +27 11 259 4000
Mobile : +27 82 852 4294
Email : lakker@iqbusiness.net
CONTACT US

Customer Segmentation

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