Get to know your neighbours with customer segmentation research

By Emma Miller

Like many of you, lockdown has provided me with a chance to get to know the neighbours: the WFH parents who have been juggling meetings and home-schooling; the elderly lady who has lived on the street for 60 years; the kind man who braved a downpour to help a neighbour struggling to fit their new sofa through the front door. Everywhere, new community connections have been forged.

It was these moments of human connection (and kindness) that I looked back on when preparing my talk for the CX2020 Housing Conference, which took place online at the start of this week.

The event’s focus on customer experience coincided with the launch last week of The National Housing Federation’s ‘Together with Tenants’ charter. I’m sure no one could have anticipated just how important and timely its launch would be, when work on the charter began back in the spring of 2019. Its aim: to ‘embed a culture (…) that values the voice and experience of residents, and strengthens the relationship between residents and housing association landlords.’ As the Federation’s chief executive, Kate Henderson, said at the charter’s launch last week, “We need to connect with residents (…), so that we can support our communities through the challenges that lie ahead.”

Right now that’s a human truth, not just for Housing Associations, but for organisations of every kind that pride themselves on thinking customer-first.

“…organisations must challenge themselves to look again at what they think they know.”

One of the traditional stumbling blocks to creating a CX-driven company culture is the idea that having happy customers is a nice-to-have. But in these ‘new world’ times we find ourselves living in, it’s no longer enough to say you care. Perceptions and needs have quickly evolved beyond simple messages of ‘solidarity’, meaning organisations have to show they care by demonstrating empathy and sensitivity towards their customers like never before.

Far from being limited to the feel good and the ‘fluffy’, the customer experience has a real and practical job to do to help customers pick up the pieces—providing meaningful (even critical) support at a time when people may be at their most vulnerable. And that means organisations must challenge themselves to look again at what they think they know.

Remember: the customer experience you provide will not judged in isolation. Far from being limited to comparison with your competitors and within your sector, customers will set and measure expectations by the experience they receive in all aspects of their lives. Some of those may be powerhouse brands but, to your customers, there is no distinction. If the likes of Amazon, RAC and Boots can deliver such great experience, why can’t you? Increasingly, there is no room to hide.

“…research is useful in helping to identify the priority segments to target.”

Keeping close to customers, and continuing to understand their changing needs and attitudes—especially when we are physically distanced—is more important than ever, and a key challenge for organisations.

Whether segmenting on the basis of psychographic, demographic, behavioural, or geographic criteria, customer segmentation research is useful in helping to identify your different customer groups, and within this the priority segments to target at different times or with different products. This not only helps to focus resources but, more importantly right now, enables organisations to develop a better understanding of the characteristics of particularly vulnerable groups, or those most in need.

Market research can be a vital tool is helping organisations to challenge assumptions that are generally accepted as being ‘true’. For example, adults of an older age group are not as tech savvy as Millennials is often a fair assumption because adoption of technology is less commonplace amongst the older generation. In recent months, however, we have seen a significant shift in behaviour patterns, particularly in this age group, with many embracing digital technology either out of choice or necessity. It’s the same story when it comes to mental, physical or cognitive conditions. Such issues can rarely be segmented by age, but more by personal circumstance. Which customers are resilient and able to cope; which are struggling with finances, or feeling anxious and isolated?

Needs based segmentation is, as the name suggests, based on dividing your customers based on what is affecting their daily lives. This type of analysis is essential to help organisations tailor their service and experience to customer need. What constitutes a great customer experience will be different things, to different people. Taking Housing Associations as an example, for some this could be supporting basic survival, such as fast home repair services, or helping with access to essential food deliveries. For others it could be empowering them to raise issues, providing advice to resolve problems, or even just supporting them to fill out forms or other tasks that they may have difficultly completing.  

“…a clearly framed and developed lens to operate under.”

Success is about ensuring you are getting the basics right to make people’s lives easier—removing friction and frustration. It’s also vital that your customer experience and communication speaks to customers clearly, and helps them navigate current challenges, as well as those ahead.

That means understanding how to use qualitative and quantitative research to ensure your customer experience remains responsive, agile and relevant. Using approaches such as panels and video platform qualitative research make this practical and affordable, even in these challenging times.

It’s also about connecting your people with your CX vision—achieving engagement across the organisation including frontline and office staff. At a most basic level, it means developing a culture that thinks customer-first, versus just completing the task in front of them. And that requires a clearly framed and developed lens to operate under. The truth is that great customer experiences are rooted in every part of an organisation, even those who might not ever have direct contact with customers.

Right now, customers need organisations to communicate clearly, act reassuringly, and respond quickly. Customer segmentation research can play a vital role in supporting that. But it doesn’t end there. Getting to know your customers shouldn’t just be viewed through a short-term lens.

Establish a best practice approach today and you will continue to reap the rewards long into the future. By continual developing their understanding of the ‘human stories’ and the common threads that bind our diverse communities, and the people who live within them, organisations will be prepared for whatever challenges the future may bring, and what their customer experience must address.