How Data-Driven Customer Segmentation Can Lead to a True Single Customer View

Do you truly know who your customers are? More importantly, does everyone else at your company share the same understanding?

Having a single customer view can be incredibly valuable, allowing you to align and focus strategies and planning across departments. It also elevates a team’s ability to take targeted, personalized, and measurable actions to increase customer value and engagement over time.

It starts by understanding the underlying behaviors that your customers exhibit so that you can better cater to their needs, talk to them in a more relevant way and know what actions to take to shift that behavior in a positive way. And where better to get that understanding than from the data you likely already own?

Transaction or event data captured from your point of sale system or website can be used to develop a range of behavioral customer segmentations. This includes RFM (recency, frequency, monetary) segmentations to help track customer value:

Recency, frequency, monetary segmentation

“Lifecycle” segmentations to understand ongoing customer engagement levels:

Lifecycle segmentation

And even “Lifestyle” segmentations which look purely at products purchased or content viewed to help understand why a customer engages with you:

Lifestyle segmentation

The beauty of this approach is that you can easily assign a segment to every customer in your database. If you have multiple segmentations, they can be overlaid to create “microsegments”, elevating your targeting and personalization capability. It uses your own data sources, which can be mined using advanced statistical and machine learning techniques to create robust, stable segments. It also means updating and evolving these customer views over time can become a reality for internal teams, without any additional external expense.

Market research can also be an incredibly useful and complementary tool for understanding your customer. It gives great insight into the varying attitudinal mindsets among your customers, above and beyond the cold-hard facts of transactional data. However, it’s rarely realistic to map research-derived segments back to every customer in your database. Layering research on top of the data-driven segmentation can add color and bring segments to life, helping the users of the segments to understand the “why” of customer behavior.

This all comes back to the idea of having a unique universal customer identifier (UID) within your data. Having this will make everything much simpler and will allow IDs from your other platforms and systems (DMP, sales management, content management, etc.) to all map to one master UID, so that you have a common linkage between systems. Each UID can then be assigned to one of your customer segments and in turn be pushed back to those systems to be used for personalization and marketing.

Once you have this customer understanding in place, you’ll want to be able to make the most of it. Applying the following principles will help you to maintain a consistent single customer view:

Everyone around the business needs to know that a single customer view is the goal. Leadership needs to make sure that all departments are all pulling in the same direction.

The benefits of alignment are obvious. Aligning strategies, language, and reporting means that departments are less likely to work in silos and can help to foster cross-functional working partnerships. Efficiencies can be gained and, as a foundational approach to all company-wide initiatives, the ROI will come from all departments — not just the one that initially commissioned (and funded) the work.

This aligned approach then needs to trickle down to the rest of the teams. And that leads us to…

If you want to ensure consistent and continued long-term use, you need to make sure all of your employees buy into this single customer view.

The key is to make these customer segments part of the daily office lexicon. Introduce them and encourage employees to talk about them as if they were their colleagues or personalities around the workplace. The more familiar people are with the profiles, their needs and their preferences, the easier it is to integrate them into the work.

It sounds gimmicky, but I’ve seen customer segments given real personalities — a name, a face, a real identity — and disseminated in some memorable ways. I’ve seen them brought to life and plastered across the workplace with life sized decals (even in the bathrooms!), trading cards with quotes and their profile stats, and even cookies decorated with their images passed out with handbooks. The more different your distribution methods, the less likely they are to be forgotten. It’s no different to how your HR team may have advertised your company’s values.

Once the customer segments become familiar, thoughts such as, “This new product would really appeal to Segment X” or, “There’s a huge opportunity here to increase Segment Y’s frequency” become quickly actionable.

The ability to use this single customer view easily and effectively is critical. The first part of this was covered above when we talked about ensuring that every UID in your database is assigned to a segment. The second part is making sure that the database is made available so that everyone can use it.

Housing all your customer data and associated attributes in a centralized CRM database means that it can be shared with your DMP, sales systems, web content management systems, feed directly into your BI reporting and be available to analysts for custom ad hoc analyses. If you already have CRM and DMP systems in place and working in unison, you may be able to simply select the ID you want to make your UID. If not, this may require some investment in your data architecture — but again, that’s just laying the foundation for ongoing success.

More often than not, companies (or a department therein) have already invested some effort into understanding who their customer is. As every organization is unique and has its own internal challenges, this knowledge may have been lost or not been given the opportunity to have its full impact. But that doesn’t mean it can’t be found and/or rekindled.

Ensuring that each of the Alignment, Buy-in and Availability pillars are successfully implemented means that your single customer view is set up to be used continually and consistently. This makes your business more customer-centric and data-driven through elevated knowledge of your customers — ultimately giving them, your customers, a more seamless, relevant and engaging experience with your brand.

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