Progress in profiling

Progress from Royal Liver recently launched a campaign encouraging IFAs to adopt a customer segmentation approach. It was based on a piece of research on our own database with some quite insightful results.

To make things simple a series of sales aids were put together profiling the ‘most typical’ customer segments and some others outlining the customer profile split for each product from the protection menu. We are also spending time with IFAs actively talking about segmentation to see how they might apply it to their own bank of customers.

Customer segmentation is one of those fundamental marketing principles that spans pretty much every industry, product and service. In essence, it is the science of ‘knowing your customer’ and right now it has never been so pertinent to advisers.

For complete clarity, it should be noted that by segmentation we refer to the process of splitting up customer data into groups with a common underlying theme. In simple terms, this may be based on age, occupation and geography, but it can easily be developed and refined to include more specific information such as leisure activities, interests and spending habits. The theory being that by dividing up customers into like-minded segments, it becomes much easier to spot opportunities, target messages and tailor products or services.

The good news for advisers who buy into the segmentation principle, is that creating an appropriate customer database should not be too difficult. Usually, the hardest part of the exercise is getting the relevant information together, but due to the nature of an adviser’s role, they already have a great starting point.

Many advisers already do segment – some more than others and to varying levels. However, what is often missing is a formal process. By translating what is in an adviser’s head into a structured database it can highlight opportunities that are much easier to follow up.

The best thing about segmentation is that you really can push it in any direction you want. Ultimately it depends on your objectives, which can be anything from tidying up a database and strengthening existing client relationships, to targeting new clients and increasing the bottom line of your business. The desired result will always dictate the approach.

Of course, there is another very important point. As an industry we now have TCF firmly embedded in our company culture. So why not evidence this by spending the time to formally analyse customer needs, wants and behaviours? It makes perfect sense.

Progress is not claiming to be a segmentation expert; but simply trying to point advisers in a direction that might really help. Often the hardest part of any data analysis is knowing where to start, so if we can even help to get people thinking then it is a worthwhile project. If advisers then go on to see up-sell, cross-sell and seek out new business opportunities – even better.

Aidan Dewhurst is IFA marketing manager at progress from Royal Liver