In this blog, I’m going to focus on a real challenge for marketers in professional services firms, segmentation and targeting.

I’ve talked previously about the importance of good data governance within firms but that was really addressing the more basic issues around quality, hygiene and data privacy.

To be successful marketing and business development professionals need to go further.

Of course, if you don’t have good data governance in place to address the basics then you’re going to fall at the first hurdle.

But let’s assume that firms are able to manage quality effectively, how do they go on from that and implement effective segmentation within their CRM system?

What are the key things we want to know?

We have a number of things in our favour right off the bat.  The first is the fact that unlike businesses who sell to large quantities of consumers, the volume of clients and potential clients we’re dealing with is relatively manageable.  The second is that the model for segmentation is fairly uncomplicated.  Thirdly most firms have some fairly well established categories or groups that they can use e.g. “Key Clients”.

However that’s where the good news ends.  The real challenge for marketers in professional firms is that most of the information that they need to segment does not actually originate in CRM.

Typically this would include things like, Client billing and Client Status, which will originate in finance.  I’ve talked previously about the data quality issues of integrating client records from finance but that can be relatively easily resolved with enough time and resource, however when it comes to the financials this really is the challenging part.

Putting to one side the fact that there is a perceived security or client confidentiality issue in allowing client financial information to be available beyond the partnership (and sometimes to only certain parts of the partnership), the real questions are:

What do you display and how should it be displayed?

The fact is that it’s probably counter-productive to show the actual financials in CRM.

People have a tendency to believe what they see on a computer screen and if you’ve had to do some manipulation or deduplication of client records to support the integration, then you run the risk of showing information that differs from the data held in finance.  This is not a good thing for the credibility of your CRM system.

So you need to think about whether you can use the financials to drive segmentation but not actually display the figures.   For example if you can define what constitutes a “Current Client of the firm” or a “Top Client for Corporate”, do you actually need to show the numbers or can you just categorise on the results of the maths going on behind the scenes?

Inward looking or outward looking

Moving on from segmentation that might originate in finance, it’s clear that some categories “belong” to CRM.

Perhaps the best example to look at is industry sector.  However this is not as straightforward as you might think.

The fact that most firms seem to have an uncontrollable desire to re-invent standard industry classifications is one problem, but that’s merely a distraction.

The real challenge is “What do you mean by sector”? 

There are a number of different ways you could look at this.

  • Do you mean the sector in which the client operates?
  • Do you mean the practice group through which your firm has a relationship with the client?
  • Do you mean the type of work you are doing for that client?  For example real estate work for a retail company.
  • Do you mean the sector that a particular contact specialises in?  This is particularly important for firms with relationships with private equity firms or investment banks that take a sector specialist approach to constructing their investment teams.

Generally speaking the sector classifications that exist within most CRM systems do not distinguish between these definitions and what you end up with is people being invited to events perhaps based on their industry sector rather than on the type of work the firm does for them or the sector that they’re actually interested in.

Furthermore, the role that a company or person has within one sector might be different from another.  For example a firm that might refer you work for one sector might compete with you in another.

Global, regional or local?

A further dimension to consider for international firms is to what extent do you try and control the way in which your users of CRM segment their data?  It’s almost certainly true that firms need to try and establish some consistent categories for segmentation at a global level.  Client type and sector, mentioned before, would probably fall under this rule.

However as many professional firms are so diverse in terms of the office, practice and practicioner structure, there is a strong argument for allowing an amount of flexibility in segmentation.    Perhaps the role of the CRM team is to regularly review the categories being used at the level “below” in order to determine if there are groups or audiences that are worthy of a more consistent approach to segmentation.

There may, however, always be cases where segmentation is so specialised to a particular group that trying to “control” the way in which they segment their data would merely act as a disincentive to using CRM and would not actually add any real value to firm-wide taxonomy.

Company or personal?

The final dimension to consider is to what extent can companies or people “inherit” the categories of the other.  Again, there are certain obvious cases, like industry sector and client status.  However, as discussed before, there are risks in doing this and the implications of automatically transferring codes need to be carefully thought through.

Recycling lists

My view is that ultimately what we’re trying to achieve, is to move away from the behaviour of recycling marketing lists.

However that’s a bit like snatching the safety blanket out of a child’s hands.

If the CRM system does not easily support the segmentation strategy then who can blame marketers for recycling lists?

However the issue that the CRM system has is not really one of functionality it’s really a matter of determining the outputs that are ultimately required and then distinguishing between the different types of inputs that can drive these.

Watch out for our Golden Rules of Segmentation.  Please contact us if you’d like to know more.