Updated: Oct 11, 2019
In our last blog post about customer segmentation we produced some social data on attitudes to health, wealth and investing.
In this post, we're going to say a little bit more about method. The value of a good customer segmentation is that you know what innovation to prioritise (more below); you reduce the amount of waste going into the innovation funnel and you take pressure off the IT department, which is often rushing to catch up with and manage two decades of innovation already.
The rise of lean start up for enterprises and the fail-fast, fail-cheap idea (or MVPs) have frequently choked the corporate innovation funnel. We hear, and see, a lot of this. Business strategists and innovators have had a busy ten years and are under their own pressure to keep pushing new ideas. But the innovation funnel is not the place to do baseline evaluation. Ideas seep through at an alarming rate and swamp the IT department. Instead we need more discipline about what to innovate and why.
Traditional customer segmentations are not helpful in shaping innovation. They reflect your understanding of your customer base and you have to believe that part of your innovation effort is to look at what you do not understand. In Flow we try to go beyond simple segmentations and build out a picture of change in customer needs.
The diagram below shows the basic workflow for that and the construction of a Customer Innovation Wall, our tool for innovation insight. Note that the engine in all this lies in those gold boxes on the left of the image. A number of tools exist to help you with this (Statsocial, or Optimove's Segmentor tool. are just two examples)
Those gold boxes are telling us that a customer segmentation needs to be shaped by at least four lenses.
Existing customers - yes, analyse in detail the composition of your own customer base and see what's going on.
User innovation patterns - but don't forget customers innovate too and you need to know how they are self-serving the needs that you have overlooked.
Competitors' customers - of course your competitors may have got there first so segmenting your competitors' customer base is a good dose of self-education.
Adjacencies - and then there are the adjacent activities that are not yet officially on the corporate radar.
Here's a brief summary of some insights you might generate, quite quickly in fact, by taking that route.
Working through those elements (using social data, web ethnography, Google or similar analytics) can get you enough data to begin structuring a wall full of insights.