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Are You Over-Serving Your Most Valuable Customers?

Posted on  13 July 10  by 

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Niche branding and segmentation—differentiating customers based on distinctive characteristics—are, of course, the bread and butter of the marketing world.  But we’re increasingly seeing a greater focus on this in the service and support world as well.

Segmentation isn’t a new concept for many service and support organizations.  In fact, many organizations use a segmentation structure that often comes directly from the sales and marketing side of the company.  But in an environment where many companies are looking to service and support as a “competitive differentiator,” companies are rethinking their strategies, and in many cases, seeking to expand them.

The problem is that many companies are going about this typically based on visible customer characteristics or behaviors: like where the customer resides or how much the customer spends.

Such segmentation strategies can be helpful for other parts of the business, but they offer limited insight into where the best service and support opportunities lie.  Indeed, using a segmentation strategy based solely on visible customer characteristics can lead companies to misplace service investments specifically.

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Case in point: Many companies assume that higher value customers demand high touch service.  So they arrange dedicated phone lines/account managers and upgrade service levels, all to provide greater service personalization.

While certainly well-intentioned efforts, CCC finds that the highest value customers actually prefer self-service over high touch live support.

In fact, we know that these customers often have the infrastructure and resources to solve many challenges on their own—and want quick access to the resources needed to help themselves.  So focusing on high-touch relationships actually over-serves these customers, expending resources that could be redirected without damaging the company’s relationship with these high value customers.

So if service and support can’t rely on visible customer characteristics, what is the right way to create a service and support segmentation scheme?  CCC finds the most effective schemes share two key components:

  • They use customers’ service needs, priorities, and desired outcomes as the basis for segmenting, not surface-level characteristics.  In other words, they match customers to service plans based on how customers actually want to be served.
  • They seek out not only similarities but the most meaningful differences among groups of customers to understand how to treat customers differently from each other and than competitors.

One good example of these concepts comes from Abbott Medical Optics.  AMO surfaces unfulfilled and unarticulated needs by creating a customer value model that maps customer roles and tasks and marries customers’ desired outcomes with service opportunities.  In surfacing these different service needs, AMO experiences a 10% increase in promoters and a decrease in detractors, part of its Net Promoter® Score. 

Creating a strategy based on customer needs certainly requires some legwork (and must align with any marketing or sales segmentation model).  But those companies who have executed well here will tell you the payoff is win-win—customers are served better and more efficiently.

CCC Members, click here to hear how other companies are implementing segmented service strategies, here to learn more about AMO’s segmentation strategy, and here to review CCC’s broader research on segmentation.

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