Segmentation vs individualization

Segmentation vs individualization

SEGMENTATION vs INDIVIDUALIZATION – AND THE WINNER IS?

Segmenting customers into groups has always been a solid way to uncover trends and obtain insights about where a business is heading. While it has its benefits, it’s never been great at targeting customers. But that’s about to change.

Meet ‘individualization’ – the agile new kid on the block, empowered by big data and advanced analytics. Individualization will help you better understand each one of your customers and enable you to take appropriate action at a customer-specific level.

Let’s take a look at how they compare.

 

SEGMENTATION

INDIVIDUALIZATION

Foundation

Based on group averages. Diverging customers are conveniently excluded as outliers, because they cannot be managed.

Based on each customer’s own behavior without noise from the crowd. All cases get their own treatment.

Responsiveness

Static and slow, based on general trends. Individual behavioral patterns are disregarded, unless they’re common.

Dynamic and highly responsive individual customer journey management, adaptive to each customer’s behavior changes.

Complexity

Generic communications are sent in batches at the same time and frequency, with the same content to everyone.

Highly complex, laser-sharp, targeted communications, adapting delivery time, frequency and content.

Relevance

Same messages per customer group, based on segment membership. Your audience simply won’t pay attention.

One-to-one messages, targets and incentives, based on individual profiling, that takes into account all key parameters.

Effectiveness

Less accurate, less relevant and less effective. Significant part of messaging resources goes down the drain.

More accurate, relevant and effective. Optimal ROI on messaging resources and customer-related investment.

While segmentation remains to be a good starting point, the extension to individualization will be a revelation. With individualization, you’ll dynamically align your communications with the behavior and preferences of each individual, and boost the effectiveness of your customer interactions to levels you never thought were possible.

And the winner is? The customer and your organization! With individualized segmentation (think millions of segments, one per person), customers will become more engaged, and you will boost customer value and KPIs.

 

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