Segmentation is a Team Sport

By Rubesh Jacobs
My colleague, Helen Gurina, recently posted a blog piece on whether data analysts or wholesalers should conduct lead segmentation.

Interestingly, this question is a microcosm of the larger issue surrounding segmentation. While executives agree intellectually about the importance and necessity for segmentation of advisors, two critical challenges to getting the effort off the ground are:

  • Helping colleagues visualize and internalize the value of segmentation. Our newest paper, The Five Advisor Segments, helps paint a picture of what segmentation could mean for an organization.
  • Overcoming the question whether distribution or marketing should own and manage segmentation.

I want to touch on the question of ownership. Our paper outlines, at the most basic level, that segmentation is typically conducted in distribution where management decides which channels are important and wholesalers decide on A, B, and C advisors within their territories. There is some value-based segmentation and little, if any, behavior-based segmentation.
The perception in marketing is that they should own segmentation of advisors and port it over to their colleagues in distribution to improve prospecting and market share. This further perpetuates the perception that segmentation is just an exercise in data analytics.

In actuality, the conversation should be addressed at a more strategic level. Segmentation should not only help determine how to sell and market to advisors, but also how to service and grow the relationship with them. That is, segmentation should be embedded in the vision, DNA, and strategy of the firm. This implies that allfunctions within a firm play a role in providing the appropriate experience to each segment.

Creation of the segmentation strategy requires representatives from virtually every function and division to be on a Segmentation Working Group. This group will define objectives, design segmentation around those objectives, prepare blueprint of the effects of segmentation across the entire organization, and manage necessary changes that segmentation will demand of the organization.

Therefore, we suggest the department owning and driving the firm’s overall strategy, whether it’s a corporate strategy group, marketing, or in some cases, finance, should be accountable for the overall implementation. At the end of the day, advisors don’t care who owns segmentation, whether it’s strategic, or if firms segment or not. What matters to clients is that their needs are fulfilled. Firms should care because segmentation is more about allocating resources to high-yield opportunities and less about solely targeting or service.
All said, segmentation is a team sport

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