Is this the end of value segmentation as we know it?

It strikes me that at times we, as marketers look to focus our budgets and efforts to retain our most valuable customers.  We also strive to increase engagement and spend from the group of customers showing the most potential to increase their future spend with our business.  But are we missing a trick by not focusing on the least likely group to increase their potential value to the business?

What about those who don’t spend much with you, but adore your brand?  In a standard RFM model (Recency, Frequency and Monetary), they are likely to be missed out, and not given the same attention as those who are spending more with you.  So should we be engaging with them?  I believe there are segments of customers with whom their value isn’t measurable on a purely financial basis.

I believe there is a space for CRM analytics and attitudinal research to be combined, to further understand your brands potential reach.  This is where the power of research comes in, and the much publicised Net Promoter Score (NPS) could help to establish the segments of customers whom adore or dislike your brand.

There is much talk of the pros and cons of using customer affinity measures such as the Net Promoter score – developed by Fred Reichheld author of the book ‘The Loyalty Effect’ and ‘The Ultimate Question’.  The idea being you ask a simple question – “on a scale of 0-10 how likely are you to recommend a {brand/product} to a friend or relative?” The responses are then measured by splitting the customer base into 3 groups: Detractors, Passives and Promoters. 
For some industries identifying those most likely to promote your brand, even if they have only purchased once, can be very fruitful in driving word of mouth influencer campaigns.  Creating a memorably brand experience for this group can drive considerable word of mouth impact, and potentially drive new customers.  That’s free acquisition, that can’t be gained anywhere else and can drive incredible value to your business in the long term.

On the flip side, those who fall into the low value/detractor category, a group least likely to spend with you, and most likely to talk negatively about your brand are equally worth considering a campaign to.  With the aim to reduce the negative impact of bad publicity by making peace with those unsatisfied with your brand/product or service.  It could save you lots in the future in rebuilding a brand or spending on PR.

                                                                           Karen De Lorenzo, Loyalty & Engagement Consultant, Truth