3.2.1 Social media options for action Business model – customer segments: basics

This section will give you an overview of the basics of customer segments and the resulting tasks for a social media strategy.

Learning Goal: Understand customer segments as a component of the business model and be able to identify, assess, and apply the impact and use of social media for the customer segments of a business model.

Reading time: approx. 32 minutes

Exercises: Exercises are in the PDF of all exercises of this course. Download it from here.

Studying a company’s customer segments in advance of developing a social media strategy is, on the one hand, a relatively arduous and occasionally dry affair, but it is extremely valuable for aligning a company’s social media use. Via this step – the analysis of the customer segments for the use of social media and the strategy development – we recognize which fundamental requirements the business model (here in the segmentation of the market) places on social media use and the associated strategy(s). If this step is not taken, the company’s social media use will quickly run counter to the requirements of the business model.

Basics

A little preface to this topic. You may find this topic very abstract and wonder why you, as a social media manager / social media responsible person, should deal with this topic in such breadth and depth. The answer to this is actually simple:

  • know your markets. In my humble opinion, trying to create social media strategies without a sound knowledge of the markets is comparable to trying to be a soccer coach in the Champions League without being able to explain the concept of offside or the task of a defender.
  • do not sell yourself short. There are social media strategists who don’t know what they can do for their company, there are social media strategists who have an idea of what social media can do for their company. And there are social media strategists who can show their management the performance potential of social media for the company at the level of the business model and thus justify requirements and resources. You define your value to the company by the expertise you can bring to the table.

As soon as you can recognize the performance potential of social media on a company’s business model and use it accordingly, you are playing in the Champions League. The path to this may seem dry and boring from the outside. But this will disappear as soon as – and as long as – you have understood the matter and its possibilities.

Definitions Market/markets, customer segments, customer groups, target groups

These following definitions and explanations serve to make the individual terms clearer.

  • Markets usually consist of demand drivers. That is, natural or legal persons who have a need for a service. Demand stands for needs and the economic possibility to satisfy them (purchasing power).
  • Customer segments are groups of people or organizations in a market that a company wants to serve and that have specific things in common (see explanation Customer segments). Customer segments arise from a decision made by a company. We therefore understand customer segments in the sense of a specific section of the market, rather than in the sense of a limited group of existing customers. Customer segments in our sense thus contain customers and potential customers.
  • Target groups emerge via a degree of homogeneity. This homogeneity may consist, for example, of shared behaviors or shared sociodemographic characteristics.

Customer segments versus target groups

Customer segments can be defined both by business aspects of the company and by their needs. Target groups are defined according to sociodemographic aspects or other similar criteria. Customer segments can contain different target groups.

Customer segments and social media strategy

For our social media strategy, we take the following content from the customer segments of the business model.

  1. the customer segment itself, which forms a market for the company, which the company serves with services geared to it, and its size.
  2. Target groups that are part of the customer segment and their sizes.
  3. the issues that make up our customer segments.
  4. the social media usage formats that are suitable for our customer segments.
  5. the corporate benefits that can be created with social media for and in the customer segments.

Sources: This information on customer segments and their target groups is usually already available in the company. The company has defined its customer segments and determined the target groups they contain. We derive the topics that make up our customer segments from the respective customer segments. We determine the social media usage formats that are suitable for the individual customer segments via the topics of the customer segments. We determine the corporate benefit that we can achieve with the help of social media in and for the customer segments via the social media impact that can be achieved in the individual customer segments.

The importance of customer segments

When we look at the benefits and impact of customer segments and segmentation, we see how big their importance is to the success of companies. In particular, they secure the future and economic success of a company through higher profitability and structural competitive advantages. No company can afford deficits in these areas in the long term.

Customer segmentation can also have strategic, existential significance for a company. The example of BWM illustrates this: In an early phase after the Second World War, Bayerische Motorenwerke was faced with the dilemma of not being sufficiently successful in the market either with its vehicles in the luxury class or with that in the small car class to be able to secure the company’s continued existence in the long term. Both market segments were too heavily occupied by more successful, larger competitors to be able to exist there in the long term. The definition of a new customer segment of motorists – for whom the sporty sedan was developed – laid the foundation for BMW’s subsequent success.

Urgent recommendation
If we recognize the importance of customer segments for the success of the company and take into account that social media can have an impact on our customer segments, we are excellently advised to take a close look here and look for starting points for the use of social media as well as for the possibilities of change in customer segmentation through social media. And if possible, before our competitors have done so.

Explanation of customer segments

Customer segments are customer groups that require their own attention and processing because they are

  • have individual / independent needs that require a separate offer.
  • can be reached via different distribution channels.
  • require their own (different) types of relationships.
  • differ in value because, for example, they differ in profitability or pay for different aspects of the offering.
individual needs as criteria for customer segments –

Individuality and independence of needs plus the need to create a separate offer for it.

Individuality of needs and problems without the necessity of an own offer is not sufficient to derive an independent customer segment.

The criterion in this case is that these individual and independent needs are so individual and independent that they also require their own offer. Problems and needs are always more or less individual, even if they occur in groups.

If needs could be sufficiently satisfied with existing offerings, we probably wouldn’t be dealing with a separate customer segment.

A need is sufficiently satisfied with an offer if the market is so satisfied with the existing offer that it does not seek anything else. However, according to Steve Jobs, the consumer often does not know what he wants until it is shown to him.key learningThe need for an own offer for a part of the market is not a law of nature but a variable that can be changed by developments, by the market itself and by competition. We note that in addition to individuality, there is also the need for an independent offer.

Social media change potential: if needs on which customer segments are built can be influenced by social media, social media has change potential on those customer segments.

Need for own offering as a criterion for customer segments

The necessity of a separate offer for a need arises

  • from the independence of the need. Existing offerings do not do sufficient justice to this independence. The user would not find other offers than this particular one less suitable.
  • a more individualized offer increases acceptance. Even if other offers would also fit, competitive performance increases due to the higher acceptance and attractiveness of a more specific or more specifically packaged offer.

A separate offer for a need can be

  • a completely independent solution for this offer (independent product / independent service).
  • the adaptation of a service / product for the individual need (product variant / service variant)
  • an individual marketing of an identical product / service.

Example social media relevance: if social media plays – or can play – a role in the individual marketing of identical products, we should consider the social media change potential on this customer segment. A typical approach and indication of such potential for change can be found in the social context. If the experience, opinion or attitude of other users is relevant for the acceptance, evaluation or assessment of the service, we should assume a given social media change potential.

Different distribution channels as criteria for customer segments

Different distribution channels as a criterion for customer segments can be, for example, different forms of retail (online, stationary retail), which entail different processes and also customer expectations and requirements for the distribution process.

key learning: The use of different distribution channels to form customer segments depends on the ease of switching distribution channels and any additional benefits from the distribution channel.

Requirements / demands as the main motive for segment formation: We form customer segments according to distribution channels because sales through the respective distribution channels place different demands on the company. These different demands can be rooted in the customer groups as well as in the channel and can exist, for example, in different batch / purchase sizes, product sizes, packaging, services and purchasing behavior. For customer segments formed by distribution channel, we also identify the motivation/behavior underlying that segment.

Questions: why do our customers use exactly this customer segment? What needs of our customer segments does this distribution channel meet?

Social media relevance: We determine the relevant motivation for our customers’ use of this distribution channel. If this motivation can be influenced by social media – i.e., for example, by the experiences and recommendations of other users – a social media change potential is to be expected, depending on the significance of the influence of others the motivation for this distribution channel.

Price latitude as the main motive for segment formation

If we can market a service through different distribution channels that are perceived as independent of each other, this gives us greater scope at the price level, as well as the opportunity to design product or service variants differently. We may also face different competition in different distribution channels.

key learning: If it is difficult for the customer to switch from one distribution channel to another, this increases the price margin.

Social media relevance: If distribution channels that were previously perceived as independent come into the user’s field of vision through social media, this can reduce price margins.

Criteria for customer segments – own (different) types of relationships.

Need for explanation of services: Different types of relationships as a criterion for segmenting customers can be found, for example, in products that require explanation orin services that can be provided with a high degree of automation as well as through personal services.

key learning: Customer relationships are often a consequence of profitability or value and can therefore also change if these variables change.

Different customer relationships for cost reasons: different customer relationships may be associated with different costs, may be caused by economic necessity, or may result from a difference in the value of customer relationships.

key learning: Changes at the cost level may enable or require different customer relationships.

Complexity and uncertainty: Different customer relationships can be influenced or shaped by complexity and uncertainty. Examples are increased need for advice, information or explanation in procurement or investments.

Value as a criterion for customer segments

Value as a criterion for the formation of customer segments stands for the economic value of the customer relationship. In other words, how much can be generated with a customer or customer group. This is irrespective of whether this value is currently being achieved or whether the customer or customer group merely has corresponding potential. Value therefore expresses the real or potential profitability of a customer segment. Different value can also result from the fact that customers pay for different aspects of a service.

key learning: The value of a customer segment also depends on the profitability with which the customer segment can be processed. A change in economics (through social media) can change the value of the customer segment.

Customer segments based on a common offering

In these customer segments, companies “collect” groups of customers whose common feature is the use of the same or similar company service. Behind this is the desire to form demand groups that allow for more economical business performance due to the size of demand. These customer segments offer companies advantages on more than one level. Customer segments add up demand that is to be satisfied in the same way / together. The addition of demand enables the economic provision of the company’s service. Companies thus generate the advantage of higher profitability.

This section gives you an overview of the categories of customer segments. The benefit of categorizing customer segments is a better understanding of each customer segment, their cause, and – for social media strategy development – the opportunities to support them through social media. It also makes it easier to understand the impact of social media.

Customer segment categories

Osterwalder and Pigneur use the following categories for different customer segments:

  • Segmented markets
  • Diversified markets
  • Niche markets
  • Mass markets
  • Multi-Sided Platforms

Categories are used to highlight common characteristics of customer segments. By assigning them to categories, we more quickly have a clearer picture of the characteristics of the segments and thus of our options for action in processing them. In addition to these examples, own / further criteria for the derivation of customer segments are also possible / useful.

Segmented markets

Definition of segmented markets: Segmented markets are distinguished by slightly different market segments. These differences can be expressed, for example, in different degrees of customer requirements and customer relationships.

Examples of segmented markets: Osterwalder & Pigneur cite the retail banking business of banks as an example of segmented markets, in which services for customers with similar needs are differentiated according to their importance, problems and value. This segmentation has implications for value propositions, customer relationships, and revenue streams. According to Osterwalder & Pigneur, similar examples can be found in the b2b industries where similar services are offered for different applications.

Diversified markets

Definition of Diversified Markets: The company serves two or more unrelated customer segments with very different needs and problems.

Criteria for diversified markets

  • The company processes services independent of each other
  • The services have their commonality / cause in the company, not in the market.

Examples of diversified markets according to Osterwalder & Pigneur: Amazon is active both as a retailer / service provider for retailers and as an IT service provider.

  • Amazon’s retail business requires a high-performance IT infrastructure.
  • Amazon markets the capability created by its EH business separately – to other companies / markets.

This approach can be relevant for special competencies and skills from a process, but also for resources. This can also result in interesting economies of scale. Starting points for developing diversified markets via internal services that are competitive. An existing strength in a function that to date can only be used for its own purposes and that is more competitive in the market either through the quality of the service or the possible price – also through cross-financing – than that of providers without this competitive advantage.

key learning: by marketing a capability or resources, additional markets or earnings potential can be tapped.

Categories: Mass Market

Definition of mass markets according to Osterwalder & Pigneur

  • Mass markets are markets with largely similar needs and problems of a larger number of people.
  • The essential of a mass market is not the size of the market but the great similarity of the needs of the people of this market.
  • Value propositions, distribution channels and customer relationships are equally focused on the mass market.
Categories: Niche market

Definition of niche markets according to Osterwalder & Pigneur: in niche markets, value propositions, distribution channels and customer relationships are geared to the special requirements of specific, specialized customer segments.

Examples of niche markets: Osterwalder & Pigneur cite as an example of this the supplier companies in the automotive industry, whose services are very largely geared to the requirements of their customers – the car manufacturers – and which are correspondingly heavily dependent on the purchasing of these manufacturers.

Categories: Multi-Sided Markets

Definition: Multisided markets or platforms serve two or more sides of a common / interdependent market.

Criteria for Multi-Sided Markets

  • common, coherent market
  • Services for different customer segments / user groups of this common market.
  • All customer segments / customer groups are interdependent and presuppose each other.

essence: The typical thing about it is that the different sides of this market depend on each other or are conditional on each other. Revenues can be generated on both sides or unilaterally in Multisided Markets / Platforms.

Examples of multisided markets according to Osterwalder & Pigneur: Credit cards :

  • interdependence of markets: credit card companies need both businesses that accept the credit card and customers who make purchases with the credit card.
  • Leveraging markets for value creation: credit cards generate revenue for both businesses through a per-purchase usage fee and consumers through the annual fee.

Credit card companies reduce the acceptance risk (not enough merchants) by means of joint acceptance in the network (acceptance of all MasterCard cards). They reduce the user risk (not enough consumers) by having their credit cards distributed by companies that have a high relevant customer potential.

Social Media and Multi-Sided Markets:: Of interest for the social media perspective on multi-sided markets is the question / effect of possible network effects. If network effects are at work in both markets, this has lasting effects in the form of opportunities / risks for market development, competition and company growth.

Free newspapers as example of multisided markets:

interdependence of the markets: without the reach generated via distribution, the free newspaper is of no interest to advertisers. Without advertisers and their ads, neither the newspaper nor its distribution can be financed.

Use of markets for value creation: in this example, value is created in only one market – through advertisements.

For products whose performance consists of content/information and its distribution, the alternative of digital content and distribution now comes into play and can cause an imbalance in the short term that can jeopardize the business model.

Trading platforms as examples of multisided markets such as Amazon:

  • interdependence of markets
  • Leveraging markets for value creation by the platform – both at merchant level (platform benefits from merchant via commission and / or fixed fees) and at user level (platform benefits from merchants’ customers by increasing its own reach and gaining access to merchants’ customers.

Amazon offers an example not only of diversified markets (through the marketing of IT capacity) but also of multisided markets via the integration of external merchants into its eCommerce system. In addition, Amazon is also an example of leveraging diversified markets.

key learning multisided markets: Success on both sides of the market is necessary for business success. Therefore, examine how social media can be used on both sides of the market and also what changes are possible through social media on both sides of the market.

Social media for customer segments

The general benefit of social media for the customer segment area of a business model is that,

  • customer segments more precisely. This can be the basis of a competitive advantage due to more successful market development for the company.
  • Identify and exploit the change in customer segments via the importance of the criteria according to which these customer segments were built up – at an early stage / earlier than competitors. This can also result in a competitive advantage based on more successful market development.

In addition, we should not neglect possible effects of social media on the individual categories of customer segments.

A need is sufficiently satisfied with an offer if the market is so satisfied with the existing offer that it does not seek anything else. However, according to Steve Jobs, the consumer often doesn’t know what he wants until you show it to him.

key learning: The necessity of an own offer for a part of the market is not a law of nature but a variable that can be changed by developments, by the market itself and by competition. We note that in addition to individuality, there is also the need for an independent offer.

Customer segmentation as a guiding basis for social media strategy development

The customer segmentation of the business model has a very comprehensive impact on the company’s social media usage via its meaning. At least it should be, as is clear from the following explanations. The company organizes its market cultivation on the basis of customer segmentation. If we use social media to support the business model, we should align social media – where possible – with this fundamental orientation. As different as individual companies and their customer segmentation is, the starting point for developing a social media strategy can be very different. The two extreme initial situations are

  • we can handle all the company’s customer segments with a common social media strategy.
  • we need a separate social media strategy for each customer segment of the company.
  • we can only handle selected customer segments of the company through social media.

While the first initial situation is rather simple and comfortable, the following initial situation can claim to be the opposite of comfortable and simple. Here we run the risk of developing a complexity that can subsequently become critical for the company. The third initial situation requires business decisions about which customer segments should be supported by social media, i.e., decisions which, in addition to the social media affinity of the customer segments, primarily concern their economic significance and future and which are (should be) made in the company even without social media.

Which grand strategy is recommended for the company can only be determined for the individual initial situation. However, we need criteria for the decision.

In general, for the decision on a / the grand strategy as criteria are

  • the social media affinity of the customer segments as well as their priority is recommended. We determine the social media affinity of the customer segments via the social media affinity of the topics of the customer segments. Prioritizing customer segments is a business decision.
  • the content compatibility of the customer segments is relevant. The content compatibility of customer segments results from the compatibility of the topics of the customer segments but also from the compatibility of the customer segments from their delimitation. So, for example, if we delineate customer segments in order to be able to achieve different prices, it makes little sense to combine these customer segments in a social media strategy.

In particular, if the customer segments – or their customers – are not markedly compatible with other customer segments, we are faced with the decision of whether individual customer segments should not be processed with social media or whether the social media strategy must enable the processing of different customer segments with independent and autonomous content and structures with possibly common technology.

The orientation of the social media strategy to the business model serves the goal of maximum support for the business model through social media. If we design a social media strategy without considering the opportunities and risks of social media for our business model, this strategy will very likely contribute less to the success of our company.

Customer segments are an indispensable core of the business model with a significance for the success of the company that cannot be overestimated, not least because they reflect the market structures and their main areas of activity to which the business model is geared.

  • The better we align our social media strategy with this structure, the better we support the company’s success. We do this by focusing on existing customer segments, starting with an analysis of existing customer segments.
  • The sooner we identify the potential impact of social media on customer segmentation, the better for securing the future of the company and its competitiveness. We do this by analyzing customer segments / customer segmentation for impact and changes due to social media.

Analysis of existing customer segments

Procedure: Keep in mind the importance of the customer segments and their content requirements, and avoid going it alone. The contact persons for the topic of business model customer segments should be involved on a mandatory basis. Once to be able to use their expertise and furthermore to ensure your social media strategy thereby also the importance and support you will need when it comes to resources for the strategy.

As a matter of principle, we prepare an analysis for each customer segment.

We examine how we can use social media for the individual customer segments based on the

  • Customer Segment Topics,
  • possible social media usage formats within the customer segments,
  • possible social media effects.

Customer segment topics: we identify the topics that are relevant – in the market – for the respective customer segments. The topics of a customer segment describe what this customer segment stands for (in the market, for social media users).

Possible social media usage formats of the customer segments: based on the topics of the customer segments, we determine which social media usage formats are possible for these topics – and the customer segments behind them. Through the usage formats, we also recognize which structural effects we can achieve through social media within a customer segment. It makes a big difference whether a customer segment is suitable for an audience because of its topics or whether a community is also possible. Or whether a themed community is also possible in principle and still feasible in the market. These differences offer completely different opportunities and risks within this customer segment, both in terms of market cultivation and the competitive situation.

Potential social media effects: we examine whether and which effects can be achieved within the customer segments through user benefits, information, communication, social contexts, participation and motivation, and network effects. This step can be quite extensive, but it shows us all the opportunities of social media in breadth and depth for the respective customer segment. Given the importance of customer segments for the business model, a higher workload, at least for the most important customer segments of a company, is no reason not to take this step.

Compatibility of customer segments for social media strategy

A company’s customer segments don’t automatically have to fit under the umbrella of a single or single social media strategy. The same reasons for which companies form customer segments, advise to question the compatibility of customer segments. Customer segments that are not compatible with each other in terms of content do not “get along” well in a social media strategy either.

With a variety of customer segments, we may be dealing with just such a variety of very different target groups and subject areas. This does not automatically mean that differences between customer segments necessarily require independent social media strategies. It’s only wise to clarify this question before we develop a “one sizes fits all” social media strategy.

As a reminder, customer segments are formed because

  • the needs of the customers require an individual independent offer.
  • they require different relationships.
  • they have different rates of return.
  • they pay (differently) for different aspects of the offer.
  • they are processed via different distribution channels.

Whether we should address all of a company’s customer segments in a common social media strategy is a question of both content compatibility and corporate strategy.

The possible problem areas can result from the specific nature of the customer segments (i.e., from the market), or from internal company decisions.

Different needs – different offers

  • Here we may have a compatibility problem with the needs and therefore with their issues. We use themes to address markets. If the needs of these markets differ, the topics may also differ to such an extent that we cannot use them together without losing the attention of the respective other customer segment (need group). A loss of attention reduces the building of reach and its activity.
  • It is advisable to select the user benefits from a social media strategy as far as possible from the environment of needs and services – provided that these topics have sufficient social media affinity. So we need either a very competitive UserBenefit that is very attractive for all needs or different UserBenefits to be able to offer an attractive UserBenefit in all segments. Different UserBenefits do not contribute to users easily recognizing the UserBenefit that suits them.
  • Where we align usage formats thematically, the problem of topic compatibility arises.

Different relationships

We address different relationships in the sense of a business model in detail in the Customer Relationships module. If customer segments were formed based on this criterion, we cannot automatically assume that customer segments with one type of relationship are automatically compatible with customer segments of other relationships. for a social media strategy

Social media change potential and customer segmentation

In order to use social media for the key element of customer segments in our business model, we should know the social media change potential for our specific business model. Based on this insight and our market, competitive and social media expertise, we can develop the social media courses of action for the customer segments of our business model as the basis of our social media strategy.

Social media potential for existing customer segmentation

Analyzing the potential for change of social media on existing customer segments is necessary because it allows us to identify possible fundamental changes for our business model. However, it requires in-depth knowledge of the topic of customer segments. For this, I recommend the reference book Business Model Generation by the authors mentioned.

Examine the extent to which social media impacts customer segmentation criteria . In other words, to what extent does social media influence or change the criteria used for segmenting customer segments.

Social media has a fundamental potential for change that also affects the segmentation of customer segments in individual cases. If, during the analysis of your company’s customer segments, you get the impression that this could be the case in one or more customer segments, I recommend taking this as a question for an additional analysis and carrying it out together with those responsible for the business model and customer segmentation.

When developing a new social media strategy, it is advisable to consider the change in customer segments due to social media. This can potentially delay the development of the social media strategy somewhat, but will result in a much higher quality and potentially higher strategic benefit of that strategy.

Social media potential for new customer segmentation

Whether social media enables the formation of one or more new customer segments in a specific case can only be clarified on the basis of careful examination. Possible indications for an additional, new customer segmentation with the help of or through social media could be, for example:

  • individual needs: if we can identify and address needs via social media that we were previously unable to address (economically), social media can potentially serve as the basis for further customer segmentation.
  • Need for own offers: if we can identify and reach user groups in social media with a need for our own offers, this is an indication of the opportunity for new customer segments via social media. These user groups are not necessarily new, but user groups that we have not been able to reach economically.
  • Distribution channels as a criterion for customer segmentation: if social media is suitable as a distribution channel, it can potentially be used to form specific customer segments.
  • different valences: if we can address groups with different valences differently in social media, which we have not been able to do so far, this is an indication of social media potential for new customer segments.
  • different relationships: Social media as a tool for building and maintaining relationships can potentially serve as a basis for new customer segments can if we can use it to better build and maintain independent, diverse relationships.

This list can only give an idea of how we can see the potential of social media for customer segmentation based on the conventional formation of customer segments.

Another way to identify the potential for possible new customer segments via social media is to ask whether and to what extent the social media usage formats (audience, social network and community) are suitable for customer segmentation.

Food for thought customer segmentation
u003cpu003eThe potential of social media is used by companies in the context of customer loyalty / customer care to build and maintain customer relationships. Where customer relationships can be stabilized through social media, a look at the suitability of social media for customer segmentation across different relationships is useful.u003c/pu003e

Options for action in social media for our customer segments

As a reminder, options for action determine the scope of action that we generally have at our disposal. Options for action are therefore not strategies at the same time, but describe a playing field that we work on with a strategy.

In order to determine our own options for action, we remember the dimensions of our options for action, that is, the levels that we can shape within the framework of our options for action. How much we can design in each level depends on the specific situation. The fact that we determine our design options for the individual levels is important for our strategy development.

Consequence: If we do not recognize or consider options for action, omit or ignore one level, our strategy will be incomplete and weak. It is better to leave this risk to the competition and check their strategy for exploitable weaknesses.

Social media affinity of the customer segments

The more affinity our customer segments have for social media, the more important it is to use social media for these customer segments. This sounds like a truism, and it is. However, this truism is less cultivated in practice than is advisable.

As a reminder, we test the social media affinity of our customer segments via the social media affinity of the topics that make up our customer segments in social media and from the social media affinity of the criteria we used to form our customer segments.

If neither the topics of our customer segments have any affinity with social media and the criteria according to which we have formed the customer segments are not influenced by social media, we can remove the customer segments from the strategy development. However, this will only very, very rarely be the case.

Social media affinity of criteria for forming customer segments

As a reminder, customer segments are customers and potential customers that require their own attention and processing because they are

  • have individual / independent needs that require a separate offer.
  • can be reached via different distribution channels.
  • require their own (different) types of relationships.
  • differ in value because, for example, they differ in profitability or pay for different aspects of the offering.

We work out the social media affinity of the customer segments via the

  • Social media affinity of the needs underlying one’s own customer segment: Needs whose significance for the user is influenced by a social context – i.e., the opinion of others or their experience – have a greater social media affinity. The more comprehensive the social context is, the higher the social media affinity of the corresponding needs should be understood. In the next conclusion, a high social media affinity of the needs on which we have built a customer segment also results in a high possibility to influence this segment – and possibly also the segmentation – via social media. The extent to which this is possible can only be clarified in each individual case. A higher or high social media affinity of needs underlying the formation of customer segments should be given correspondingly high attention – both in terms of the impact on customer segmentation per se and in terms of the opportunities for market cultivation.
  • Social media affinity of distribution channels: if we use distribution channels with higher social media affinity, we can influence these distribution channels via social media. If these distribution channels are also the basis of customer segments, social media also has an impact on the customer segments. The individual impact of social media depends on the respective circumstances and the use of social media by one’s own company and the competition.
  • Relationships and their social media affinity: Relationships often have an affinity for social media. We can shape social media and build and maintain relationships. If a customer segment requires special relationships and that relationship can be delivered as a service through social media, social media inevitably impacts that customer segment – and its design. In this context, we should also remember that companies can reach not only their own customers but also potential customers and customers of competitors via social media. Of course, this also works in the other direction.
  • Value and the impact of social media on this value: Value is an assessment that can be based on one’s own competence and knowledge and on objective facts. Or can be done on less objective and emotional basis and taking into account other people. Depending on the extent to which the value of services as the basis of customer segments is or can be shaped by objective or subjective factors, by the experiences and opinions of others, the greater the impact social media can have on the value of services and thus also on customer segments and market segmentation. In this context, we should not forget that social media also increases the level of transparency in markets.

Customer segmentation topics and their priority

We identify the social media courses of action for our customer segments via the themes of those customer segments. This applies to both existing and new customer segments and to both existing and new customer segmentation criteria.

In addition to listing the topics of our customer segments / customer segmentation, it is important to define the priorities of the customer segments as a whole as well as the individual topics of the customer segments in order to determine the options for action. This can be a demanding process in terms of both time and content, which is better tackled sooner rather than later and which should be supported by all affected areas (especially with regard to priorities).

Gamechanger Social Media

We consider the impact of social media as a gamechanger via its impact on our business model, i.e., via the potential for change of social media on our own business model.

If we recognize that social media has a significant potential for change for the company’s business model, it is necessary to take this potential for change into account in strategy development by setting appropriate priorities for the respective topics.

When analyzing the social media performance potential for our company, we have probably already done this analysis and can now draw on it. Otherwise, now would be the time to perform this analysis and consider the contents in the strategy definition.

Change potential of social media on a business model: The change potential of social media on our business model describes how far social media can change the content of our business model. We develop this potential for change through the individual modules of the business model, as explained briefly below.

  • Customer segments: Social media can have an impact on a company’s customer segments through its influence on the criteria for customer segmentation, or it can fundamentally create new customer segments, for example, by defining and addressing them more precisely.
  • Value propositions: how value propositions are influenced by social media in their performance or value.
  • Customer relationship: how customer relationships are reshaped or changed by social media.
  • Channels: how social media can change the performance of business model channels.
  • Key activities: how social media can change the key activities of the business model.