Customer Segmentation: Know Your Brand, Know Your Customer for the Best Service Strategies

Customer segmentation example diverse happy people doing yoga outside together

Customer Segmentation: Know Your Brand, Know Your Customer for the Best Service Strategies

Key Points:

Customer Segmentation

Even with a defined customer base, different sections of your customers have different  needs. Customer segmentation, grouping your customers by separate criteria, is helpful in many areas of your business. However, in regard to support, segmentation streamlines customer service. Examples: identify customer groups by location or product line; separate most active or high value customers from less active ones; if you are a B2B brand separate your small biz customer from your enterprise clients. 

Lisa Painter, Sr. Director, Customer Experiences at Zendesk  talks about assigning agents to customers in specific segments. In effect, this makes these agents experts on their segment, reduces transfers and shortens customer wait time.

This also allows for acquiring targeted sentiment and other customer data. Certain survey questions are only applicable to certain segments of your consumer base. Knowing which segments to ask what gives you usable data and eliminates potential negative responses or no responses cluttering up your data. Plus, you won’t be wasting your customers’ time either.

However, you can’t get into customer segmentation until you’ve done your brand and customer due diligence. 

Know Your Brand

Before you can know your customer you need to know your brand. This goes beyond your product and your style guide. Consumers want brands who align with their values and lifestyle. According to a 2022 Harris Poll conducted by Google Cloud, 83% of consumers in the US want this and over three quarters of those surveyed had left a brand over a clash of values.  

You can’t fake it either, at least not for long. Brand authenticity is more and more important to consumers. Research indicates 71% of consumers want to support authentic brands and 70% say these brands inspire confidence

 Forrester defines it this way: Perceived brand authenticity is a function of what a company does and what a company says about what the company is.” 

What you say and what you do need to match. To accomplish this you need to get clear on your brand identity:

  • Can your customer service agents easily answer policy questions because your brand is so clearly defined?
  • What is your brand vibe?
  • What are your brand ethics?
  • Is your product aligned with those ethics?
  • Does your company culture match your brand voice?
  • Transparency – Are you transparent with your customers about how materials/labor for your products are sourced?
  • Are there current events or issues that are actionable in a way that reflects the values of your brand and your customers?
  • Does your brand support any charities or initiatives either company created or in association with another entity?
  • What are your goals for your brand and how your brand impacts your community/country/world?

Know Your Customer

Remember this phrase: de gustibus non disputandum? The classic Latin saying that translates roughly to: “ matters of taste are not to be disputed,” acknowledges different people like and need different things. It would exhaust your company resources to try to be everything to everyone. Instead, invest time and energy into defining your ideal customer and tracking their evolving needs. 

Identify your key demographic or target audience. Demographic data covers socio-economic areas like race, age, gender identity, income, relationship status, education, family size,  homeownership and location. 

Notice that these categories don’t give insight into personality and only some insight into lifestyle habits, which may be key to your niche market. You could have two customers of the same age, race, gender identity, income, education and location but one is devoted to yoga and the other has no interest in exercise at all. That’s important if you sell yoga equipment.

If you’ve identified your company values clearly, it’s likely your ideal customers will have similar ones. Staying on top of shifts in values and the reasons for them helps your brand to stay relevant and not be tone deaf. Give your customers the means to communicate with your brand via the channels they use (social, email, text…). Invest in listening to and acting on that communication.

In regard to privacy, it’s vital to stay compliant of course. Beyond that, have privacy policies and options that respect the preferences of your customers.

Changing Customer Needs

Understanding your customer is not a one and done activity. Just like life is always changing, so are your buyers. You need to change with them, or even ahead of them by anticipating their needs.

Customer sentiment is one piece of this evolving puzzle. Assess customer sentiment via surveys and analysis of support ticket exchanges. Solutions like CSAT.AI analyze customer interactions in real time using phrase based models and retain survey sentiment for the three most recent touches. This lets agents know how they are doing and give you a picture of customer satisfaction as it changes.

Use social listening for additional sentiment data and to understand what your buyers are looking for. 

Use What You Know for Troubleshooting and Strategy

Having a deep knowledge of your brand and your customers gives you the power to create effective support strategies, improve growth and weather difficulty more easily. 

Here are a couple of examples of companies that took the time to source the data and used it effectively.

Growing Through Listening and Authenticity

Lululemon is a company founded on knowing its brand and customers. Before it began, Founder Chip Wilson identified a target market of underserved, educated, health-focused women. 

By listening to that target market the company was able to create products that were specific. Instead of basic yoga pants they created bottoms described as “buttery soft”with moisture wicking fabric and a four way stretch that endures the deepest squats. They also make their products in a ton of colors and sizes because they know not all of their audience is a size 2 and wants to wear pink. 

Knowing their audience values authenticity, they invested in ambassadors like fitness professionals, influencers and athletes who like and use the brand, rather than celebrities. 

All this knowledge helped the company to increase their market value by 40% in 2020 when many other companies faltered and folded. 

They went beyond their product line to create daily online workout streams and community groups to support their customers. Lululemon also saw a 30% growth in their newer men’s apparel line. The company experienced a 22.3% five year compound growth rate from 2016-2021 and is projected to grow 21.73% per year over the next five years.

Flipping Negative Sentiment for Positive Brand Results

Sentiment is a deep subject, but it’s important to recognize not all negative sentiment is bad for a brand. This is where the analysis aspect comes in. One great example of this is the Nike Kaepernick ad that saw a drop in net sentiment for the brand from 26.7% positive 12 months prior to the ad, to -4.7% four days following the ad. 

However, instead of pulling the ad, Nike looked at the data in perspective with the company’s broader goals. The brand’s anticipated growth markets were international, and the controversy over the ads was predominantly US based. Further, the interests, activities and backgrounds of the sources of negative sentiment were unlikely to be Nike’s main customer base. By gambling on this controversial ad campaign, Nike saw an increase in brand mentions (12.4 million between Sept 3rd and 9th 2018, equalling 133 billion potential media impressions), and an over 30% increase in online sales.   

These are great examples of how knowing your brand, knowing your consumers, understanding customer segmentation and tracking changes helps you make informed decisions. You want that knowledge before you’re hit with a difficult situation you have to respond to (or not) quickly.