Using behavioral insights to better segment customers.

Using behavioral insights to better segment customers Rita McGrath

Thought Sparks

This week, we’re launching a new guidebook series at Valize, designed to share core ideas about strategy today in a convenient online format for using with your team or on your own. The first one has to do with customer behavior and the all-important understanding of how traditional segmentation lets us down.

Here’s a little taste.

Traditional ways of segmenting customers – easy to do, compellingly quantifiable, and often strategically useless.

Well, as we’ve learned from the relentless tracking of our search and other habits, advertisers and marketers are now learning that understanding behavior trumps understanding such characteristics.

We’ve all been taught, and subjected to as consumers, that the most important things to know about customers are their demographics.

How old are they?

Where do they live?

How much money have they got?

Netflix and the use of algorithms to make your experience better In some cases, the algorithms really do make your experience better, which to me is a win/win. An interesting case of using technology, experimentation, and algorithms to improve the customer experience for real can be seen in the case of Netflix. Instead of segmenting by age, for instance, the company is able to put groups of users into “communities” whose members share common interests in what they watch. They’ve added the ability for users to create ratings and are continually experimenting with refining the choices they offer people to help them make sense of the sea of possible content they might want to watch. Personalization can even go so far as the images shown to people when they scroll for content.

Defaults, Green bubbles, and blue bubbles Another fascinating testament to the power of understanding what customers value is the great blue vs. green text message bubble competition in the United States. Messages on Apple phones are in blue. Virtually identical messages on an Android phone are green. The importance of this was drawn to my attention by our colleague Jerry Kim.

Our Learning Guides launch this week!

In an exciting development for us at Valize, we’re launching the first of our Learning Guides this week. They are a combination of online resources (such as videos and exercises), downloads, assessments, and application ideas. We are planning to release a guide in a week. For those who want a deeper dive, we will also be offering collections, which are six guides for the price of five. We believe there’s a market for learning as close to doing as possible and that’s what our guides are all about.

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