Social CRM, Communities and Customer Segmentation

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I strongly agree with Paul Greenberg that Social CRM is all about looking for answers to the Social Customer. Social CRM is about turning CRM from the inside out to the outside in. This is easier said than done, and mostly easier written than said..

A couple of weeks ago I wrote about how Social CRM is about the relationships of your Customers (of which the relationship with your Company may be a part) and not primarily about the Company – Customer relationship. Today I would like to discuss Communities.

Communities are about people, not business functions

Communities, in respect to Social CRM, are mostly discussed in relation to business functions (like Customer support communities).  Communities are about people though, because that is what they consist of. Business functions is what a business needs or wants and is therefor a typical inside-out way of looking at communities. I believe it is of vital importance, if you want to be successful in Social CRM, Social Business or Business in general for that matter, that Communities in fact are people who share a certain passion, relationship, interest, need or whatever it is that bonds this group of people, through stronger and/or weaker ties.

If you understand that communities are about people that center around a certain interest or need, a whole new pallet of opportunities arise. I’ll focus around one specific element: Customer Segmentation.

Outside-in Segmentation focuses on Customer needs

Most companies segment their Customers the inside-out way. They make attempts to label specific Customers based on common characteristics in their Customer base. Mostly these characteristics involve things like Customer Lifetime Value (or revenue for the less advanced), demographics, transactions, product-combinations, purchasing behavior etc etc.. When we see communities as groups of people that share a certain passion or interest, we understand that labeling Customers on the above inside-out characteristics makes little sense, if it is not preceded by the Customer way of segmentation: By their needs and shared interests.

And this is where it gets more difficult. I think most conversations in the Social space will not tell you anything about this, unless.. Unless you find yourself a way to engage your community to do so, somewhere where you can see, observe and even engage in these discussions. People will not talk about this in so-called support communities, where they visit you to get some answers to problems they have in creating value from the products or services they bought from you. They will talk about their needs and jobs-to-be-done when among likeminded and peers.

Not all Customers have the same needs

So, should you build an innovation or co-creation community? I’d say, good idea, but then you are again focusing on your own business needs and function. When you truly put your Customers interest at the heart of your thinking, you would think of your Customers as people that share common interest. You would want them to share their passions and interests, and their experiences as they are trying to get the job they want to do, as to better understand them. And, since not all your Customers have the same passions and needs, you would want to segment your Customers according to these passions and needs. Because if you do, you get exactly what you want: Customers engaged into conversations, not with you, but with other people they share the passion with, and you can be one of them.

Now I would like you to shake off the idea of online communities (yes, you were thinking about those, not?) and think Customers segments and communities of people.

How would your CRM Strategy be different if you segment Customers into need-based communities?

If you understand which Customers share the passion and need, how would you go about treating them differently than Customers that don’t share those needs? How would you differentiate your product or services to better meet their needs? How would you design the service experience differently? How would you be able to better find correlations between sub-segments, by more traditional characteristics, and how would that help you better target new Customers? How would you be better able to design campaigns? Not easy questions to answer, but I bet you, if you listen really well, online and offline, you will find the answers. And I bet you that Customers will notice that you started talking their language, not yours, even if you want them to engage into your value proposition.

You will not make the difference for your Customers by implementing tools. You will make the difference by learning to think people, not functions, by learning to think from the outside in. And by leveraging that thinking to better design the end-to-end Customer Experience, focused on communities of people with shared needs. Try it, it’s fun!

What do you think? Does segmenting your Customer community by their needs make sense?

1 COMMENT

  1. This is an excellent column, and points out the problem inherent in top-down, CRM-based segmentation: People who share the same characteristics may not share the same passions or interests. For example, how many groups are there on Facebook devoted to a typical segment like “males, 18-35?”

    But the issue then becomes: how do you identify groups with common passions? Sentiment analysis, etc. is very difficult and expensive. One solution is community branding — segmenting groups based on shared heritage, values, experience, language, etc.

    I am now working on a book about community branding, and how to engage ethnic, cultural and faith communities, both nationally and internationally. It’s an emerging area — Coke is going to devote up a substantial portion of its marketing budget to reaching, for example, Hispanics or Blacks. I am look for corporate (and I need to underline corporate) case studies who can talk about how their companies are targeting and reaching ethnic, cultural or faith communities, either in US or internationally (including non-US firms). Sign off authority is granted before publication, and anonymous is OK (eg, “a leading provider…). I am looking to wrap up interviews by July.

    So, email me at wredensignup (at) gmail.com, and I can send complete details, including book outline, chapters that have been excerpted in a major business publication, interview agenda, etc.

    However, and this is important: I am not talking to vendors, consultants, agencies, experts or anyone else who is not directly involved in corporate community branding. If you fall into that category, please forward this to your corporate contacts.

    Thank you for your consideration, and again, great column.

    Nick

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