Harnessing the power of segmentation – an investors perspective

By Stephen Whitten 

In an increasingly competitive market, there is a real need for businesses to identify and understand distinct customer groups, to enable tailored strategies that drive engagement, loyalty, and growth.  

Efficiently segmenting clients and prospects is always a major challenge for marketers. Segmentation is usually the starting point. But how to segment is the real question, especially in less well-established categories like Private Markets. 

Hopefully the days of simple ‘firmographic’ analysis have gone. While there will always be some common themes within an organization “type”, e.g. Corporate DB plans, each organization will have its own individual needs and preferences which managers need to understand and cater for. 

Research will be the bedrock to help identify the customer decision-making journey. Where do customers, i.e. investors, source ideas? What criteria forms the initial screening? How do they draw up a short list? What factors drive the final decision making? 

For most investors performance is usually the first consideration and most use it to build a short list of managers. But few make decisions based purely on performance. Ultimately, it’s the quality of the people and processes which drive differentiation between managers and inform brand choice. 

In a recent Phronesis self-funded study focusing on Private Markets, comprising a series of in-depth interviews with investors, it’s clearly not a case of “one size fits all”. Investors have different preferences when it comes to the 3 “Ps” of performance, people and process, and make different trade-offs between them. However, in our study there are some common themes emerging. 

In another study which is currently ongoing, we are seeing three discrete groups of different investor types (or personalities). Early indications suggest they cut across firm types, i.e. they are just as likely to appear within a Corporate DB plan as an Endowment.  

The objective of any segmentation is to give managers the tools to be able to identify their clients’ personality types and unmet needs so they can deliver tailored strategies to effectively engage and convert clients. Our studies are showing that there are unique identifiers which will help managers assign individuals to personality types or specific needs.  

We will share more findings from our segmentation study but if you would like to know more about our overall approach to B2B segmentation, please get in touch.