INSURANCE BARTENDER

INSURANCE CUSTOMER SEGMENTATION MARKET: THE NEXT GROWTH DRIVER FOR INDEPENDENT INSURANCE AGENCIES

Both agencies and carriers should be evaluating, developing and implementing a segmentation strategy. Many carriers are developing or already have supporting strategies to meet the evolving needs of their customers. But the question is, as you progress on this journey are you engaging with your carriers and other strategic business partners in the discussion. A well-developed segmentation strategy can help the insurance organization in dividing the market into small segments where the customer needs are similar.

Think about the groups of people in your life — family, friends, coworkers, etc. Chances are you don’t communicate with each of these groups the same way. For example, you most likely chat with your family in a different way than you do with your coworkers. You probably have different expectations of and methods of interacting with each of these groups, too. The same goes for your customers. Within your business’s base of customers, there are certainly different groups of people. The people who make up these groups have unique needs, traits, personas, pain points and expectations for your business in terms of communication and support.

The key to creating and maintaining successful relationships with your business’s different customer groups is understanding their preferred styles of communication and their unique needs. This helps you effectively and efficiently meet (and, hopefully, exceed) their expectations by creating a customer experience tailored to their needs.

Why segment customers?

There are several other reasons why customer segmentation is so important. Here are a few examples of how a segmentation strategy can help agents and carriers: • Learning about your customers on a deeper level so you can tailor your content to their unique needs and challenges • Creating targeted campaigns and ads to resonate with and convert segments of customers • Improving your customer service and customer support efforts by understanding and preparing for challenges different groups are likely to experience • Increasing customer loyalty with customized content and interactions • Understanding who your most valuable customers are and why • Communicating with segments of customers via preferred channel or platform. • Meeting specific groups of customers where they are • Identifying new opportunities for products, support, and service efficiently

Now that you understand what customer segmentation is and why it’s a process worth investing time in, let’s cover the most common models and types of segmentation.

Although the following list from HubSpot doesn’t cover every type of customer segmentation, it provides you with a starting point for organizing your customers. Along with each model is an associated list of ways to segment your customers.

Segmenting customers can be broken down into four easy steps:

1. Determine your customer segmentation goals. Think about why you’re creating a customer segmentation strategy — ask yourself why you are spending time on segmentation and what you hope to derive from the process.

Something to note when developing your customer segmentation goals is that they’re going to be unique to your business — segmenting customers isn’t a one-size-fitsall process.

For example, your number of goals will be unique to you based on your business’s size, type and industry, as well as who your customers are.

Additionally, your goals may be relevant cross-team (e.g. marketing, sales, service) or for one specific department or business unit. So, when determining your customer segmentation goals, use your company’s specific traits and business needs as a launchpad.

2. Segment your customers into groups of your choice. Once you have an idea of what you’re looking to get out of the customer segmentation process, decide how you’ll segment your customers. There’s no right or wrong answer here — your segment groups will depend on your specific business, customers and the goals you set in the previous step.

For example, your customers could be divided into segments and sub-segments such as: 1. Household sector 2. Industrial sector 3. Trade sector 4. Institutional sector 5. Geographical region

The household sector is a segment which could be subdivided into: • Salaried class • Self-employed; and • Retired employees.

The industrial sector could be subdivided into: • Public sector; and • Private sector.

Likewise, the other segments can be subdivided into appropriate sub-segments.

3. Target and reach your customer segments. Once you’ve segmented your customers, it’s time to determine how you’ll target them across your organization. By ensuring all departments (e.g. marketing, sales and service) understand how your customers are segmented, members of those departments will be able to effectively target your customers through their work. 4. Run customer segmentation analysis Analyzing your segmentation efforts will provide insight into the way you’ve organized your customers — this way, you can make updates and changes, if needed. Check in with your marketing, sales, and service teams regularly to get their opinions on any necessary segmentation adjustments. You can experiment with new ways of grouping your customers together to decide what makes the most sense.

You can also gather feedback from your customers to segment them more effectively into their appropriate groups. For example, you could conduct surveys to improve your behavioral segmentation by asking customers about their feature use and product-use habits/tendencies. This will allow you to more accurately organize customers based on their specific behaviors.

Lastly, review the way your customers are segmented whenever you update your product or service, re-brand or revise your buyer personas. These changes may call for reorganizing some or all of your customer segments. A well-developed segmentation strategy is paramount to fully utilizing and leveraging technology, specifically process automation.

Many carries have been rapidly expanding their Digital Process Automation or DPA. My next article will focus on what digital process automation is and how you can put it to use in your agency to increase efficiencies and profitability. If you are interested in exploring the development and implementation of segmentation strategy and levering the unique data you have on your customers, contact the IIAW today at info@iiaw.com or 608-256-4429. We would be happy to assist you and your agency through this process.

Portions of “The Ultimate Guide to Customer Segmentation: How to organize your customer to grow better was used to help” by Kristen Baker was used to help create this article.

Matt’s Mixology

Rainbow Paradise Cocktail with Blue Curacao

I don't know about you, but this drink makes me think of the beach and spring break. Give this a try while you are wasting away in Margaritaville (aka the beach) while on spring break. You'll thank me later.

Ingredients

• 4 oz. pineapple juice • 2 oz. Malibu coconut rum • 1 oz. water • 1 oz. grenadine • 1/2 oz. blue curacao • ice

Directions

1. Pour grenadine into a 16 oz. hurricane glass. 2. Fill the entire glass with ice. 3. Mix the pineapple juice with Malibu in another cup. Pour this mixture into the glass with the grenadine syrup (stir to make the layers better and to create an orange layer). 4. Mix water with blue curacao and pour gently (using a spoon) over the yellow layer and you will see that it flows nicely and creates a green layer. 5. Serve with a lemon slice or orange twist. Cheers!