You likely run targeted marketing campaigns, have multiple levels of products, and offer different sales terms to meet the variety of needs of your customers. Why offer so many choices? A one-size-fits-all approach to business rarely works. Yet, most companies still operate their contact centers with cookie-cutter processes. With customers’ increasing expectations, it has become more necessary than ever to utilize segmentation to meet the needs of high-value contact center customers while also offering a level of personalization to all customers.
Segmentation has long been a dirty word in service organizations because it implies that certain customers get better service than others. While it’s simply a fact that some customers are worth more from a financial perspective than others, segmentation is not always about offering more to some than others. Rather, it’s about providing a level of service that is fitting to the specific customer’s needs. Yet, even with this reality, plenty of contact centers have uncertainties about the value of implementing segmentation for a variety of reasons.
To Segment or Not to Segment? That Is the Question
When making a decision on this important customer experience strategy, it’s beneficial to carefully look at the pros and cons.
On the positive side, it’s a given that segmentation enables you to provide a higher level of service to high-value customers, allowing you to increase both retention and revenue. Specific promotions or campaigns can be targeted to these customers to cross-sell and upsell to further increase bottomline benefits.
Looking at the cons, there are typically infrastructure costs associated with implementing a segmentation strategy. If you are using a cloud-based system that supports a variety of solutions, it may not require as much effort as it would if you’re using a legacy PBX system. There is also the dilemma of high-value customers who don’t always want or need high-value service. In these cases, the over-the-top service can be a needless cost and can even overwhelm the customer.
Types of Segmentation
While segmentation seems like an all-or-nothing proposition, there are actually different approaches that can be taken. For example, Virgin Airlines offers a traditional form of segmentation with a dedicated phone number for its frequent fliers that enables them to get advice and make reservations with little or no hold time. Other customers are directed to the company’s central call center, which offers a still high quality but less personalized level of service.
While the approach of segmenting by established customer value is most common, it’s not the only way to differentiate service. With an omnichannel CX strategy in place, customer interactions on every touchpoint can be tracked and service level determined before a customer even engages with an agent. Segmentation can be accomplished via a variety of digital and voice channels, including IVR. Using business rules, callers can be routed to specific agents who are equipped to handle segmented customers.
Isn’t Every Customer Important?
Of course, the answer is yes! However, a better question might be what do customers expect? Every business must consider customer expectations and adapt their CX and contact center operations to meet these expectations. This is where segmentation comes in handy. The reality is customers can have a wide variety of expectations. In many cases, a segment of customers doesn’t want or need a high level of service. When this is the case, it can be a smart strategy to provide a less intensive level of service to these customers so that contact center resources can be better focused on those who require more service. It’s also important to consider the driving factors that build loyalty. For some, it’s service and for others it’s competitive pricing or the quality of pricing.
Segmentation is truly about matching service to expectations and determining how much you want to invest into each segment. This requires a deep understanding of all customer types, as well as a breakdown of costs to upgrade your contact center system and processes to support segmentation. By making the effort to evaluate these factors, as well as looking at your overall CX strategy, you can determine the right approach for both your company and your customers.