Customer segmentation and profiling of data infographic by the Intelligent Data Group

INTELLIGENT DATA GROUP CUSTOMER SEGMENTATION AND PROFILING OF DATA The benefits of data quality to business are numerous and often difficult to measure as many are intangible. In this infographic we discuss a range of benefits to encourage businesses to invest in their data quality through a structured data management approach. @ f In its raw state, data is of lower value as it may not be relevant to the customer or the campaign. The segmentation and profiling of customer data is what brings this relevancy and the ability to send personalised targeted messages to a target group which are more likely to warmly receive them. RESPONSE RATES EMAIL 0.12% TARGETED DIRECT MAIL 4.4% An investment in data segmenting and profiling is an investment in getting the most out of your data. Always remember that customers want to be treated personally and not as just another person in the database and you won't go too far wrong. In this infographic we explore in detail the practice of customer data segmentation and profiling with an emphasis on business customers rather than private residents. WHAT IS CUSTOMER DATA SEGMENTATION? So what is customer data segmentation, we provide a definition here: CUSTOMER SEGMENTATION IS WORK UNDERTAKEN TO DIVIDE A CUSTOMER DATA BASE INTO LOGICAL GROUPS OF BUSINESSES THAT ARE SIMILAR IN CERTAIN WAYS, E.G. TURNOVER INDUSTRY LOCATION WHAT IS CUSTOMER PROFILING? Customer profiling is related to segmentation but goes a step further in creating a portrait of a customer. In the best profiles a customer has an integrated photo, full business description and as many characteristics as possible. Customer profiles are sometimes called personas; the basic concept is that for a given campaign where the persona matches the campaign criteria it is acceptable to send the marketing message out. CUSTOMER DATA SEGMENTATION AND PROFILING: A POWERFUL COMBINATION When combined together customer profiling and segmentation is extremely powerful. Analysis exercises will provide reasons why previous campaigns have suffered from low response rates and also give suggestions on how they can be improved in the future. HOW TO SEGMENT AND PROFILE DATA Here are the steps required from start to finish to segment and profile. There's so much to say on this topic that this is a general overview, which should provide a good idea: 1 What data is required? - Strategically determine which data needs to be collected, as part of this consider; the economic cost of data collection. Create broad descriptions of profiles 2 How will the data be gathered? - Determine how the data will be gathered by putting processes, systems, policies and procedures in place 3 Collect the data - Now collect the data by integrating from various sources (e.g. in-house systems, external sources, website, telephone call verification, surveys, focus groups, etc.) 4 Communicate internally Communicate within the business about the benefits of data segmentation to increase participation Develop segmentation an profile data analysis - Develop methods to analyse data into the required segmentation and customer profiles 6. Use data in active campaigns - Use the segmented and profile data in marketing campaigns such as Email and Direct Mail Post campaign appraisal - Appraise the success of the campaign and tweak segmentation and profiling of data where it is required. Remember, that segmentation is an ongoing task and not one that should be undertaken with a "we're segmenting as a one-off" type mind-set CUSTOMER SEGMENTATION AND PROFILING SOFTWARE The whole area of customer segmentation and profiling can be quite a “minefield" and can get in the way of the "day job", so software to help in the process can be helpful, this gives the following benefits: TAILORED SAVED TIME AND SPEED OF FUNCTIONALITY EFFORT DEPLOYMΕNT Specific for segmentation and profiling, the software will have significant investment from Using an "off the shelf" system saves considerable time and Using an "off the shelf" system means the project can commence rapidly effort compare to creating systems previous projects in-house OUTSOURCING CUSTOMER SEGMENTATION AND PROFILING Another approach that many business customers use is to outsource customer data segmentation and profiling to external specialist data agencies. Benefits of this approach are: Speed - Using an Agency will deliver fast results Experts - Agencies will be experts in the field, with a vast amount of experience Saved internal effort - Outsourcing this work will save internal staff time and effort and allow them to concentrate on other core activities Buy external data - As well as segmenting /profiling their own data, Agencies will have access to Quality - Agency data on average will be of a higher quality than customer produced data as it's their "day job" and something they do everyday Completeness - Agency data is likely to be more complete, with an increased number of fields which is ideal for segmentation and profiling additional relevant business data from the work they complete on an ongoing basis BENEFITS OF CUSTOMER SEGMENTATION AND PROFILING Customer segmentation and profiling is beneficial to the organisation (and staff) and customers. These benefits are detailed in the sections below. BENEFITS TO THE ORGANISATION: Improved CRM (Customer Relationship Management) and loyalty: O the retention of a higher number of customers O increased response rates and metrics on marketing campaigns O improved ability to target and profile specific types of customer (e.g. specific location targeting) O also all of the customer related benefits in the section below will indirectly benefit the organisation as well! O there will be a lower opt-out and unsubscribe rate as customers will see less reason to unsubscribe O increased clarity relating to customer related data and campaigns O develops niche marketing capabilities O improves interaction with the customer and brand awareness Maximisation of ROI from Email and Direct Mail campaigns: O reduced waste by not sending out irrelevant mail O increased profitability due to improvements in campaign effectiveness BENEFITS TO THE CUSTOMER: More targeted mailing - customers will receive (typically) less mail. The mail they receive will be more relevant and targeted A more personalised approach - All customers will benefit from more personalised marketing. Offers are more personal and likely to be of interest to the customer in their line of business, making the purchase of goods and services more likely Sources: 1) http://www.intelligentdatagroup.co.uk/increased-customer-staff-satisfaction-quality-data 2) https://www.cmocouncil.org/facts-stats-categories.php?view3all&category=Ddirect-marketing