Rebecca Nash writes:
Segmentation is widely used in the private sector, to get closer to customers, to provide a language for understanding, and to create a framework to make the most of available resources. In the public sector, it can represent a powerful way both to prioritise customer insight and improve service delivery. Hence the reason that the IIPS (Institute for Insight in the Public Services, the co-venture between The Futures Company and BMRB) turned its attention to segmentation in its first breakfast briefing of the year, in particular as a tool for service transformation.
While planning the event we realised that, despite these benefits, some are put off by segmentation because of its specialist, technical jargon. But we also wanted to make the point that segmentation demands more than analytical skills – it also requires strategic and cultural awareness. A segmentation team needs to draw on a range of expertise to succeed, and the cultural challenges can be just as significant as technical ones.
In her presentation, IIPS Chair Michelle Harrison demystified the use of segmentation for those interested in better designing and embedding the method in their organisations but also emphasised that organisations must be clear about why they’re using segmentation. Sometimes it is not an appropriate insight tool and other methods will work better.
In the public sector there is growing recognition of the benefits of customer segmentations, but there are still concerns about equity (when some, not all, groups are targeted); the scale of public services (when your ‘customers’ are entire populations); and the analytical approximations that produce the segments (the boundaries of attitudinal and behavioural segments). But panellists from the Department for Schools, Children and Families (DCSF) and the Department of Health (DH) illuminated how segmentations that go beyond socio-demographic profiles are informing policy, interventions, marketing and communications, and how the government community is building up a body of best practice in this area.
The Futures Company will take another look at the technical and cultural challenges of segmentation, from the perspective of the private sector, when we host a breakfast briefing at our More London offices on 14 May. Please contact Jennifer.Kivett@thefuturescompany.com for more information.