The last few weeks has seen corporate banks hit the headlines as they cut 10,000's of jobs and announce restructuring plans to enable a focus on key markets.

On the face of it the segmentation they are using focuses on profitability of markets and risk exposure. Very simple but also very sensible. The differentiating factor is that they are changing how they work based on these insights. What other businesses are changing how they work based on changes happening in their market segments or customer segments?

As we went into recession we saw changes in the consumer market we'd not seen in previous recessions, as interest rates fell mortgage payments changed, with some households being better-off and others worse off. For the worse off we saw that spending reduced but items seen as luxuries in the '90's recession where now necessities, like mobile phones, Sky TV and holidays. Many companies predicted and observed these market splits and changes but how many acted on them?

To capitalise on the benefits of market changes on a business three elements are needed:

  1. Segmentation insight: a segmentation that uses internal and market data to differentiate customer needs and trends, insight on the segments through granular analysis and research to enable identification of areas for focus and growth.
  2. Customer Next Best Action: applying the segment insight to your individual customers or prospects; this includes using adaptive predictive models, business priorities and value inputs into real-time decisioning to understand the next best action for an individual customer across all interactions in inbound and outbound channels. This could be a product opportunity, a service opportunity to grow the long term relationship with the customer or 'do nothing'. 
  3. CRM process design: making sure processes are ready to receive the segment and individual customer insight across all channels. Customers see the business as one, so the experience and treatment needs to be consistent and joined up across all channels.

As we start to come out of recession and consumer outlook becomes more positive, consumers start to relax their careful spending patterns and the market is starting to change. Do you know a business that could not only benefit from customer segmentation insight but also how to change the business to act on this insight?

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