How to implement segmentation into your contact strategy

In our recent guide to executing an effective omnichannel collections strategy, we discussed the importance of using data to personalise the strategy you use to engage with your customers.

However, if you want to make your omnichannel collections process even more efficient, it’s vital to begin segmenting your audience.

Segmentation is used highly effectively across all sorts of industries. By collecting data that builds a picture of a consumer and their preferences, businesses can tailor their communications and practices to certain customer ‘segments’, providing a more personalised experience. However, while this technique has been used for years in marketing and sales, many collections departments are yet to make the most of it.

But where should you begin?

How to segment your customers

So, once you’ve collected the data you need, how can you go about segmenting your customers?

1. Centralise your data

Essentially, this just means having all your data in one place. After all, cross-referencing data across multiple different locations is time consuming, inefficient, and can lead to missing vital information. However, with centralised data you can see the full picture, drill down into the data you need, and segment data into different categories so you can find things more easily.

2. Finalise your segments

Once your data is centralised, you need to decide the most relevant categories for your customers to be segmented into. So, if you’re segmenting for your contact strategy, segmenting customers by their preferred type of communication method is likely to be vital. You can use information such as:

• Demographic factors
• Credit score
• Payment method
• Collections stage
• Ability to pay off debt
• Type of debt
• Preferred communication method

3. Decide your approach for each segment

So, once you have your segments, you need to decide how you’re going to approach each one differently. If you’re segmenting your customers for channel preference and propensity to pay, you need to take into account factors like whether they’re a first offender, continually in debt, or they’ve been identified as vulnerable, as this will impact the channel used and the frequency of communication.

Some organisations have used this segmentation information to exclude customer groups, who respond quickly to emails or SMS, from dialler activity – freeing up agents to deal with more complex cases over the phone.

And when dealing with complex cases involving more vulnerable customers, you can develop pre-emptive communication methods to stop people in this segmented group from becoming unresponsive. For example, you could send out pre-alerts ahead of a bill cycle, make courtesy calls to maintain engagement, and make customers aware of your support options even before they fail to pay.

The benefits of segmentation for collections

1. More personalised collections experience for the customer

Segmentation allows you to create groups within groups, meaning you can really hone in on the best approach to engage with a customer – on their terms.

2. More likely to reach customers at the right time and via the right channels

When you take the time to segment your customers and ensure they’re reached in a way that works for them, you’ll provide a more empathetic experience, which is likely to speed up response times too – saving your business time and money.

3. Gain a better understanding of your key customer groups to optimise your overall strategy

A key benefit of collecting customer data is that you can paint a really clear picture of who they are and what their struggles are, so that you can speak to them on a more personal level.

4. Improve customer satisfaction and encourage brand loyalty by providing a tailored experience

Having all the above in place can help to ensure that, even when you need to discuss tricky topics with your customers, they have an overall positive experience that doesn’t turn them away from using your services again.  

5. By tracking behaviours, you can better predict how and when that segment will make payments

You don’t need to be in the dark about how and when your customers will pay – you can use past data to make predictions, meaning you have more visibility over your collections process.

6. Dedicate more time and support to your most vulnerable customers

Being able to paint a clear picture of your customers and their circumstances is also extremely helpful for pinpointing those that perhaps need more support, so you can channel more resources towards them and do what you can to maximise their welfare.

It’s time to start communicating

If you’re looking for support with implementing segmentation into your contact strategy, it can be helpful to consider working through this process with a collections partner.

At Sigma Connected, we do collections differently: providing a comprehensive end-to-end solution for collecting your outstanding revenues on time, while acting with empathy and compassion to ensure your customers stay brand loyal. Whether you need support across the full collections lifecycle, from pre-delinquency to write off, or at specific pain points where extra support may be helpful, we’ll be on hand to offer expert assistance wherever you need it.

Find out more about how you can start segmenting and reaching out to your customers in the way they prefer here.