Tis the Season to Segment

Posted on December 21, 2019


What I’m listening to – Frank Sinatra Christmas (the holidays call for the Chairman)

What I’m watching – Re-watching Lord of the Rings trilogy (the alternative to Hallmark Channel schlock)

What I’m doing – Last-minute holiday shopping – locally of course!

The holiday season has me thinking a lot about how we provide excellent service to one another and our residents. Being inundated with ads and offers put me into thinking about delivery and logistics – what can I say. “How do they do that” takes over above my thoughts of what a nice gift something would make.

Service is a constant in local government – I would argue that providing service is the underpinning of the whole endeavor regardless of what department we work in. We should be considering service delivery whether we do direct external service or are an internal service provider. We have to serve one another for the enterprise to work. It’s important that we examine how we provide service and look for ways to improve service.

A customer service ethic starts with knowing who you’re serving. Customer segmentation is a wonky label for the process where we divide customers into groups. The idea of segmentation is that we want to provide information and service to the group in an effective way and that not every audience cares about the same things. An example of customer segmentation is the ads that we all receive this time of year – they’re targeting us based on data derived from our customer profiles. Seems basic right? Well, do you know who your organizations’ customers are? Do you have strategies to serve their needs?

Here’s some wisdom from the Harvard Business Review on segmentation:
Segmenting, at its most basic, is the separation of a group of customers with different needs into subgroups of customers with similar needs and preferences. By doing this, a company can better tailor and target its products and services to meet each segment’s needs. This isn’t, as McKinsey’s John Forsyth says, simply for marketing or retail firms. “We see many, many companies saying, ‘I want to get more consumer-driven and customer-facing. But sometimes the organizations don’t know how to start. I’d say you really start with a basic understanding of your consumers or customers, right? And that’s segmentation.” (Gavett, 2014)

Here are a few pitfalls that many companies fall into when they start thinking about segmentation. One, companies rarely create a segment — more often they uncover one. Two, segmentation and demographics are very different things. “You have two people, we know they’re the same age, we know they’re British citizens, and we know they’re of royal blood,” explains Forsyth. “One of them is Prince Charles. The other is Ozzy Osbourne, the Prince of Darkness. They’re in the same demographic segment, but I can’t imagine marketing to them the same way.” (Gavett, 2014)

So how can local government benefit from customer segmentation? Segmentation lets you think about who you are talking to, to reach that audience more effectively, and to track the message once you engage. Segmentation is also important in local government when the City Council asks, “who have we talked to?” – you can tell them who, how and why.

Segmentation should include clear group-specific characteristics that define an audience. The groups should be large enough to be meaningful and measurable. There should be communication channels considered for each group – these strategies might overlap for each audience but evaluating how best to reach the audience will be important. Finally, you should be able to focus services and messages to your segments based on what you know or learn from them.

Customer segmentation is just a small part of a customer service strategy but it’s an important approach. I suggest spending some time thinking about service while you’re enjoying family time over the holidays. You wouldn’t get the same gifts for every person on your list – why would you provide services to everyone the same way?

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