Segment or Die! The choice is yours

Mariam Sharp gets the inside track from some firms that are getting segmentation right

The title of this piece comes from an article that carried the headline: The Choice is Stark: Segment or Die! It was written by Avinash Kaushik, Analytics Evangelist at Google and in 2009 and quickly went viral.

Kaushik wrote:

“There is a reason your analytics data does not make any sense. There is a reason you are unable to find an iota of insight that you can action. There is a reason you feel data is your enemy.You see, you are not following one of the holiest of holy covenants when it comes to data analysis: segmentation.”

Speaking at the recent Travel Distribution Summit Europe 2014, Daniel Waisberg, Google Analytics Advocate, said that it was still one of his favourite data-related quotes and highlights just how important segmentation is. Let’s now take a look at why with five tips from speakers at a recent event.

1)     Big data versus small data: David O’Flannigen of BoxClever said: “Its not about big data or little data its about customer data.” Big data is still very overwhelming, to SME’s in the travel sector that often don’t know where to start. What is important to keep in mind however is that there are small steps that you can take in understanding your customers whatever the size of your business. Segmentation is a process to help you understand your customer’s behaviour. It is from this that you can begin to understand how to personalise your services and reach.

2)     Use what you knowBig data is the aggregation of data from a wide range of sources; this makes it unstructured and difficult to use by smaller businesses without the right expertise or processing power. This should not stop you - by using the data that you already have and creating clear customer segments - you can still make informed business decisions to grow your business.

3)     Know your customer: Every business small or large has key questions that it has about its customers. Make sure you know how your customers find your business. When you know how customers find your business then you can identify the best ways to align your marketing to find more. There are lots of tools to do this online, but don’t forget that the advantage that smaller businesses have is the ability to ask people directly. This can lead to more qualitative data as well as the quantitative data available through other means. Ken Young, VP Revenue Account Management, Preferred Hotel Group emphasised this: “Talk with your guests, as well as using social media, find out what works, what doesn’t. Remember we are in hospitality.”

4)     Segment to convert: Rene Fredrickson International Webmaster at DFDS Seaways said: “Customer based data tells us how we do, but doesn’t tell us how to sell more.” The next step is to understand how to segment your customer data so that it gives you information about what converts your customers, so that you can increase your sales. Fredrickson suggested looking at other kinds of metrics such as customer satisfaction: a 0.1% increase in satisfaction led to 4% growth at DFDS Seaways.

5)     Don’t overcomplicate: “You don’t need complicated things to start. If you need to, start simply with a spreadsheet. As soon as your business grows you can do more.” This was advice from Rene Dechamps CEO and co-founder, Mind your Group, in response to a question about start ups can use data. If you still find using analytics daunting bear in mind that the data you need to understand your customer behaviour is possible to manage with simple tools. What could be more difficult is becoming clear about what is important for your business to know at each stage of growth. Dechamps continued: “Know what you need to know.”

This might take time, or it might be that you need training or external advice initially, but don’t lose sight of what the important next goal is for your business. With a clear focus your initial steps to using data could position you for greater things in the future, at which point you can take on the aggregated unstructured sets of data that is big data.

Need to know more? Why not try out EyeforTravel’s Research Library which has a database of 700 hours of transcribed and searchable industry audio and video, industry insight and original research

Guest columnist Mariam Sharp is a business consultant focusing on projects that promote international exchange. She can be found on LinkedIn and Twitter

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