The service design toolkit consists of a number of different tools which have been borrowed and adapted from a range of disciplines, including, but not limited to, marketing, industrial design, and the social sciences. Whilst traditionally a marketing tool, customer profiles are widely used within service design and design thinking approaches, but the way we think about and use customer profiles as designers today is arguably quite different from how those involved in marketing activity might do the same.
The concept of segmentation emerged as a formal component of contemporary marketing practice in the mid 20th century, but the customer segmentation developed by Madison Avenue executives in the 1950s is different from the customer personas which started to be used by designers in the mid 1990s and have since developed further alongside the disciplines of service design and design thinking.
So, what is the difference between customer segmentation and customer personas and can both be useful in the design process?
Customer segments and customer personas are not mutually exclusive, however, they are different tools with different purposes. Customer segments help us to understand a marketplace or customer base whilst customer personas help us to understand more about the lived experience of a particular group of customers within that marketplace.
For example, in social housing, we may segment our entire customer base by age, income or life stage; we can think of this as ‘vertical segmentation’. However, when designing a new policy, product or service, we cut across a number of vertical segments to develop personas based on the identified needs and motivations of a group of customers, set against a specific context such as their understanding and use of digital technology; we can think of this as ‘horizontal segmentation’.
Customer Segmentation groups people based on distinct characteristics. Segments are generally developed through big-data analysis and are defined using demographic information such as age, income and location or behavioural information such as interests, opinions, values, lifestyle, risk aversion, or life stage. Customer segments provide a generalised overview of like minded stakeholders within a given marketplace and can help an organisation differentiate between the types of customers that exist, and what those customer types might be interested in or require of them.
A customer persona is a fictional but fact-based archetype that represents the key traits of some of those customers, based on qualitative data collected through primary research with real people. Personas have something which data and research reports often don’t – personality; they bring a certain group of customers to life. A persona is defined by information which characterises customer goals, motivations, pain points and desires. They are not meant to be restrictive categories or exclusive boxes that are representative of all customers but rather represent the indicative emotional and behavioural traits of some customers. Personas are not a representation of a single individual but rather a synthesised set of observations representing many real people. Personas offer an effective way to create empathy with a group of customers and provide us with a rich understanding of real customer needs, motivations and pain points.
This advertisement by Danish TV company TV2 is a great example of the difference between vertical and horizontal segmentation.
Understanding the differences between these two approaches to customer profiling is important in terms of deciding which to adopt at which stage of the design process. However, whichever option we chose, we have to be mindful not to reinforce lazy stereotypes. This is especially relevant when synthesising personas.
Try to think of a positive stereotype, I bet you can’t – they have a negative reputation for good reason. Stereotypes are a fixed and oversimplified belief about a particular type of person based on assumption alone; this means that they are almost always used to reinforce a negative opinion. Archetypes on the other hand represent a very typical example of a person based on factually accurate information. Therefore, when we are looking at developing a set of personas, we must be careful to base them on first hand, unbiased, qualitative research. This is important, especially when designing public services, because archetypes help us to shift our thinking and design products, services, and policies which are grounded in the needs of real people and build upon assets, rather than focusing on deficits. Archetypes help move us:
- From transactions to relationships;
- From rationing to resilience;
- From centralised services to networks;
- From one-size-fits all to flexible and adaptive services.
OK, so when should I use segmentation and when should I use personas?
Customer segmentation is usually based on secondary research and large datasets. Customer segments provide a general overview of our entire customer base and are useful in helping us make strategic decisions. As a marketing tool, customer segments offer a great opportunity to communicate with customers more effectively. Personas can cut across a range of customer segments to provide us with a better understanding of small groups of customers and are useful in helping us make detailed design decisions. As a design tool, personas help us to understand people in greater depth than data might do on its own, helping us understand why people behave in certain ways, and helping us surface customer needs, motivations and concerns. Good personas are contextual, foster empathy, bring research to life and allow us to engage with customers at every stage of the design process, whether they are in the room with us or not.
In design, segmentation combined with desktop research can help us develop a hypothesis on which we can base our research plans. Personas are a product of that research and along with a detailed set of insights provide the spring board for ideation and prototyping activity later on in the design process. Both are a way of profiling our customers, but both offer a different set of advantages and disadvantages depending on what we are trying to achieve.
Simon Penny 