Market Segmentation – Have you adjusted your model through COVID-19?….You need to!
The volatility caused to businesses by COVID-19 is often talked about. How can businesses continue to develop an agile customer experience strategy to target the right customers, at the right time with the right message?
Through Market segmentation. However, the traditional approach needs to be reviewed.
What is market segmentation?
Simply put, it is the action of dividing a market into a homogenous set of customer types.
For example, we recently completed work with Melbourne airport, where we segmented their market by international and domestic travellers, and then by travel type, such as domestic business or international holiday travellers.
Why is segmentation helpful?
Segmentation will help you to prioritise your key customer segments, allowing you to then have a targeted focus on the highest value segments.
This is exactly what we did with Melbourne Airport, resizing their top traveller segments so we could then revalue those segments to deliver a go-to-market strategy that met their specific needs and wants. But what happened to these segments once COVID-19 hit?
New landscape, new segment focus
The collaboration with Melbourne airport looked at how COVID-19 affected future traveller consideration. Moving beyond a stagnant segmentation approach, they measured customer sentiment every three months to then forecast who are the travellers of priority at this time.
Melbourne Airport’s segmentation was refreshed three times in 12 months, compared to a typical 2-year cycle, ensuring they were delivering on the immediate needs of traveller segments.
Melbourne Airport was able to adjust their strategy because they knew their new priority segments and what they needed to deliver to make them feel safe to travel again.
An agile segmentation approach: customer needs are changing quickly
If you haven’t changed your segment model over the past 12 months, chances are you’re executing a strategy that is no longer relevant with the ever-changing market.
COVID-19 has identified that segmentation models need to be refreshed every 3 to 6 months to ensure you are keeping aligned to your changing customer needs and not missing out on your new high value segments.
THINK has utilised a priority segmentation approach with a range of clients across Australia.