I’ve written about this experience before, and amazingly, my experience hasn’t improved in the past couple years. It’s the coffeehouse slow and inefficient service that I’m talking about.
On Saturday mornings, I frequently go with my son to grab a quick breakfast before we get to his early-morning music lesson. He always orders the same thing, and I don’t vary from my usual order much, either. I come in, clearly in a hurry, telling my son “Go ahead and order, hurry”, as opposed a casual laid-back look that says, “We would love to have a relaxing time drinking coffee, let’s see what we should have this morning”. I also use my reward app and pay with it. So, technically, they should know some info about me and what I order. In other words, there are many signs about me that the coffeehouse staff can see and act on: both by observation of body language and by looking at the reward system data. But I don’t see such tailoring of experience based on this available information. Like I wrote a while back, I still get the slow and inefficient service, which always makes me nervous about getting to our music lesson on time. A feeling that becomes visually apparent as I start getting antsy in front of the cashier or have to specifically request the staff to get me my cold-served pastry out of the case, which is right next to the cashier who took my order.
You may say that I’m expecting too much! There are hundreds of people that go through that coffeehouse each day. How can they tailor the experience in hundreds of different possible ways for each customer? You are right, that would be too much to expect. But isn’t there a way to to the least common denominator of a set of customer types? More specifically, can’t we group different customer types into a few manageable categories based on their characteristics and needs, then enhance the customer experience based on the information about those few categories of customers? Yes, we can. The practice of grouping customers is not novel in marketing, it is called Segmentation. A term almost all of us are familiar with. What is relatively novel is that Segmentation isn’t only for Marketing, it can also be beneficial for Customer Experience!
Customer Segmentation for Better Customer Experiences
Traditionally, when colleagues in various industries talked about Segmentation, it was mostly for the purposes of Marketing or Sales. To optimize products and services, to promote them, or to organize sales efforts towards these identified segments of customers. Segmentation involves understanding the different types of customers—their characteristics, their needs, attitudes, and their preferences—in order to determine the most meaningful “unique” groups of those customers. These identified groupings of customers would be unique in the sense that, in aggregate, they have a distinctive set of characteristics that make them a “different type of consumer” from each other, even though some of the individual characteristics may be common across multiple groups. Most often, organizations then build marketing and product strategies based on these unique groups and learn about them. Very rarely is this knowledge used in other areas of the organization to help serve the customer better. And that is ironic, since many organizations today talk about the “one customer” or the “whole customer” and aim to integrate information across the organization about their customers to provide a more coherent experience for each customer.
In my recent blog, “Want to Deliver the Best Customer Experience? It Takes More Than a Metric,” I talked about the current trend of customer focus and the newly established and emphasized Customer Experience office in organizations. I also raised the caution about the risk of these departments, who may isolate themselves by focusing on a metric to measure the success of their efforts related to providing better customer experiences. In addition, the isolation of customer experience by being owned by a particular department may take away the opportunity for the rest of the organization to best help the customer. This can lead to silos that hinder the integration of information about the customer. For example, the continued use of customer segmentation mainly or solely by Marketing is a critical sign of this dangerous silo.
All Benefit from Understanding the Customer Better
If an organization already has a customer segmentation in place (again, usually conducted by the Marketing team), which defines the distinct customer segments by various characteristics beyond demographics, such as needs and preferences, then this information would be very useful for Customer Experience initiatives to provide better, more tailored experiences to customers. This effort would also help lead to a more effective “whole customer” ideology. How?
Let’s think about an example of an organization that has a variety of types of customers. If the organization ignores the fact that they have a variety of customer types with different needs, expectations, and preferences, then they would serve these customers with only one type of product and service, therefore providing them one type of customer experience. This one solution would only meet a small percentage of customers’ needs.
Now let’s think about an organization who recognizes the different types of customers they serve and leverage segmentation to identify and understand a few distinct groups of customers. Based on this information, they can do multiple things to serve these customers better:
- Create a variety of products and services that best meet each segment’s needs and preferences
- Create a variety of customer experience strategies and behaviors that are implemented at customer touch-points to delight each segment by meeting their expectations
- Create a variety of marketing and communication strategies to provide more effective promotion and information to each segment to help them get the best out of the products, services, and experiences the company offers
As demonstrated by this example, an organization who leverages customer segmentation can create better customer experience for the “whole customer” multiple ways.
Can the Coffeehouse Tailor the Experience Based on my Segment?
Going back to my coffeehouse example, how could this company better leverage information on customer to serve me better each time? As I mentioned at the opening, this company already has information about me, at least what I order most frequently and when. And they see me coming in with my son, fast-paced, and in a hurry. If the company were to make better use of customer information and segmentation, they would have segmented their customers, and I would be in a segment with many other customers who would have the common need to “get-food-and-get-out-quickly”. Maybe a “soccer mom in a rush” kind of a segment. We can even say “people in a rush”, if we want to make the segment bigger and more worthwhile.
Based on this segment, characteristics might include at least, “they come in for a quick grab-and-go food and drink, they are on the way to another appointment and likely to be in a hurry, and they are going to go for simpler items that don’t require heating or making from scratch”. Based on this valuable learning, the company would inform a variety of functions, among which is Customer Experience (CE) Office (or Operations, if this company doesn’t have a separate CE Office).
How can the CE Office use this information about the “hurried segment”? For instance, they could work with Operations to come up with strategies and specific tactics on how each customer segment should be treated at touch points. Then they could work with Training to train the front-line staff how to respond appropriately. The staff would be first educated about the various segments. Then, they would be taught how to read the customer and identify the probable segment based on both transactional information (from the reward app) and the behaviors or body language of the customer. Finally, they would be provided with the tactics that Operations and CE teams identified as the appropriate way of handling each customer segment to provide the expected type of customer experience.
Understand the Customer, Provide Better Experience, Create Customer for Life
If this coffeehouse followed these above steps, then I would get my two pastries from the case next to the cashier while I’m paying for my order, and my son could start eating his pastry while I’m waiting for my tea. There would be no rush, no stress, no unpleasant experience, no regretting of stopping by this store instead of a competitor. The company would have a very loyal customer who won’t even consider other options for similar rush grab-and-go needs.
Is this impossible? No, it is not. I have been to similar food providers where they do provide the food right away while I pay, others who know who I am (because I go regularly, just like this coffeehouse) and don’t have to yell my name to give me my order but just bring it over to me, even if I used my husband’s name when ordering. So, it is possible. But it does require a little homework on the company’s part, and a little more focus on being in tune with the customer by the front-line staff, with the goal of delivering the best customer experience for the “whole customer”.