Thinking Segmentation? Begin With A Plan NOT A Solution

Sandi Verrecchia

Working in officeThe term segmentation has readily become a buzzword in the world of credit unions. Many credit unions wants the end product of segmentation – a method to group like members but, like every good long-term strategy, much planning needs to be done at the beginning to test readiness, choose the right method and ensure success.

Segmentation works best when it is not a marketing solution but rather a business solution. While marketing is generally the project sponsor, it is important to understand how the various functional areas throughout the organization will use the segmentation output. Alignment up front will ensure a common understanding and will alleviate some of the issues that many organizations face post implementation.

The planning phase typically has the following stages:

  • Understanding the corporate strategy
  • Stakeholder identification
  • Stakeholder interviews
  • Vetting of assumptions
  • Validate and set agreement
  • Allocation of resources
  • Method design analysis and decision
  • Output tools and expectations such as dash boarding & CRM.

Segmentation is not a “one size fits all” solution. While some of the components and analytics of the various solutions may be similar, every credit union will be unique in its execution. With this in mind, each organization needs to understand how segmentation will tie into organizational strategies and objectives as well as other strategies such as dash boarding and CRM before it chooses a “best fit” solution. Upfront planning and collaboration will pave the way for choosing a solution that is best for the long-term success of both the project and the organization.

Once the planning stage has reached the point of agreement the decision as to which method best fits your organizational needs can be made. There are many, many ways to segment membership from simple balance/produt groupings to demographics to profitability to Life Time Value (and a few in between). The most important point to remember is that the deliverable of segmentation should drive action. Action in members, staff, sales and marketing efforts and ultimately results. Therefore a long-term strategy should be based on analytics that can create distinction in members based on actionable value to the organization.

At Satori Consulting Inc. we have been creating segmentation and analytical solutions for credit unions for over 7 years. Our solutions have been built using credit union data and have been built specifically for credit unions. We support the process from planning to execution to ensure each project is successful.