Rob Markey of Bain shares his insights and experiences on how customer segmentation can be used to improve loyalty and drive growth by targeting your offerings in a manner most relevant to your target buyers.
There are six basic things that companies should do to define and deliver to their target buyer, yet very few actually do this.
- Design their target that have similar needs that can be met by the company
- Develop a relevant value proposition
- Acquire more attractive customers
- Deliver excellent customer experience
- Cross sell, grow share of wallet
- Deliver more profit per customer
Bain research has found that only 23% actually deploy this discipline. Yet the companies that do are experiencing and an additional 10 points of growth.
He shared a case study of a Big 4 audit firm faced with little differentiation and slowing growth. Through segmentation analyses they found larger companies in regulated industries made up the larger percentage of profitable Promoters. Through better aligning resources with this segment and re-branding to focus their attention in these markets, they expect to achieve double digit organic growth.
In another case study, Bain assisted a pet store chain that was experiencing a declining stock price. Through segmentation and understanding the "pet parent," they transformed the store layout and developed new services to specifically target this segment. As a result of their focus on this buyer they have enjoyed significant turnaround in their stock price.
The difference between satisfaction and loyalty is ordinary serviced delivered exceptionally, and exceptional services/features delivered well. "Moments of truth" must be prioritized so you can address those most valued by your customers. Rob introduced a quadrant for evaluating touch points along two axes: potential to delight and impact of failure. This allows an organization to evaluate those touch points that may have the greatest impact on customer loyalty. From here, organizations should view their processes from the customer prospective vs. their own internal functions. This is the key to unlocking the value.
Rob leaves us with an important point. Don't ask the ultimate question unless you are prepared to listen. This has been a consistent them of putting NPS into action.
