Audience segmentation – the Holy Grail for local government communicators?

Key points

• Audience and customer segmentation is widely used by commercial organisations and presents an opportunity for local government communicators.
• Whilst many councils rely on the use of Open and Administrative data, incorporating commercial data could provide more opportunities for success.
• To be able to target the right people, in the right place with the right messaging it is essential to access and use up-to-date information about your residents and their associated contact preferences. Commercial data offers this necessary insight.
• Campaigns that utilise a blended data approach – making collective use of Open, Administrative and commercial data – can result in more robust outcomes than simply relying on traditional sources of data alone.

Audience segmentation is the process of dividing and organising your residents into meaningful groups – or segments - so that you can prioritise the delivery of relevant services and tailor communications that resonate with the channel preferences of each group. It’s a strategy that has always been an integral part of decision-making for commercial organisations, but what can this intelligence bring to the table for local government organisations?

There are the three common data sources available to local authorities:

1. Open data – data that comes from official public sources such as those available through the Open Government License.
2. Administrative data – data collected and processed by your council’s service teams and partner agencies.
3. Commercial data – data available at postcode, household and individual level from commercial suppliers. This includes geodemographic and lifestyle information.

Employing an audience segmentation means utilising a commercial data source that will complement Open and Administrative data sources traditionally used by local authorities.  Commercial sources add scale and completeness to your data. There are various data products you can get with their own insights on income, population, lifestyle, expenditure, such as CACI’s Acorn datasets.

Commercial segmentations can be used by local government across key policy areas from social care to waste and recycling, mainly to inform decision making around budgets and resources. Away from policy; transformation and behaviour change are two areas where segmentation is used extensively. For example, many authorities use it to assess those community groups who could be encouraged to increase participation in waste and recycling activities. Others use it to better understand the behaviours of online and offline communities to support a communications and engagement campaign. 

One of the key challenges faced by local government when using segmentation to devise a meaningful engagement campaign is how they define what is ‘meaningful’. This definition can be different depending on who you ask – so what is the basis of a meaningful campaign in local government?   

A meaningful campaign typically consists of three key attributes – (i) data & intelligence, (ii) an understanding of preferences and (iii) relevant messaging

Date and intelligence - what’s the difference in the data?

When it comes to data and intelligence it is essential to understand who you are serving. Your communities, your customer, your resident.

They key to success here is to understand the demographic, lifestyle and behavioural characteristics of people you want to communicate and engage with.

Local authorities using an evidence-based approach typically fall into three distinct camps;

1. Those who use Open data
2. Those who use Open and Administrative data
3. Those who use Open, Administrative and Commercial data as part of a blended data approach

So, what’s the difference?

Open data does come from a robust source, it’s available at a variety of levels of administrative geography and it’s free! This may sound ideal; however, it typically has a data lag and does not provide the necessary detail required to understand lifestyle and behaviours at community level. If you’re looking at devising a campaign to support the council’s digital transformation strategy, Open data is unlikely to provide insight to help understand the digital behaviour or channel preferences of the local population.

The Administrative data that local authorities hold about their residents or service users provides valuable insight into a snapshot of the community you serve. Who subscribes to the garden waste collection scheme? Who has signed up to paying their Council tax online? And what do you know about those people who have responded to a resident’s survey? Although this is a valuable resource that will provide insight into service users that could be used to support communications and engagement activities, it does not provide a complete picture of all residents, meaning there will be community groups you know absolutely nothing about.

Commercial data – whether stand alone or segmentation – provides local government with an opportunity to plug the gaps left when Open and Administrative data. The increased use of this intelligence is largely due to the fact that it’s more up-to-date, more detailed and provides insight that simply isn’t available through Open or Administrative data sources. Many authorities want – and need – to be more commercial in their approach to delivering services and communicating with residents. This can only be achieved effectively by having access to detailed and up-to-date demographics, lifestyle and behavioural data. This data provides users with a consistent view of the whole authority and will deliver insight such as digital behaviour, channel and marketing preferences and whether they have paid for an online service in the last 12 months which also includes Local Government Services.

Whilst commercial data provides users with more detailed and up-to-date demographic, lifestyle and behavioural data about the UK population, it is important to remember that this is simply one part of a big data jigsaw. Where a blended data approach is adopted – making collective use of Open, Administrative and Commercial data – we have observed that the outcomes are much more robust than simply relying on traditional sources of data alone.

Channels and marketing preferences

If you want to achieve something meaningful, you also need to understand the channel, contact and marketing preferences of who you are engaging with and how you should reach them. A crucial requirement is to understand how they are likely to engage with you in a response to a campaign. It is also important to remember that this isn’t just about how you communicate externally with residents, but also how service users interact with the council.

When understanding residents’ preferences, there are a variety of key questions that must be answered before assessing the viability of a meaningful campaign. One of the most important questions for local authorities, and the wider public sector, right now is “who is online and who is offline?”. The answer to this question will ultimately shape how you deliver services and how you communicate with your residents.

Some authorities have created fantastic online services that were only dedicated to their online residents. They didn’t consider their offline community and only realised they had made a mistake when challenged by Members about digital exclusion. Ultimately, these projects were scrapped wasting valuable time, resource and money. This demonstrates just how important it is to understand your audience to ensure that services meet the needs of your community.

It’s therefore essential that as a local government communicator, you are constantly thinking:

• How should we communicate?
• How will our residents engage with us or respond to us?
• What are we trying to achieve?

Messaging

If you understand the demographics, lifestyle and behavioural characteristics of your residents and you know how they like to be contacted and respond – messaging is easy!

If a council is looking to devise a campaign to reach the right people, in the right place with the right message then they must make better use of data and intelligence coupled with preference information.

 A clear understanding of the demographic, lifestyle and behavioural characteristics will help to develop and implement a successful and meaningful campaign that reaches and resonates with the right audience. Without this resource, councils will struggle to answer fundamental questions such as:

• Who are we targeting and what is the message?
• What is the campaign designed to do – create awareness, provide information or encourage behaviour change?
• How will we encourage them to respond or take action?
• How important are the images we use?

Is audience segmentation the Holy Grail?

There is not a definitive answer to this question, as people will always have differing views. Some will embrace using this kind of intelligence and others will be more sceptical about its use. The answer to this question, however will ultimately be driven by the following:

1. Whether you have the time, resource and budget to consider making use of audience segmentation to help support meaningful change in your community?
2. Whether you have or are adopting a blended data approach with the aim of building a robust picture of your residents.
3. Understanding of the needs and requirements of your residents based on their demographic, lifestyle and behavioural characteristics
4. Uncovering channel, contact and marketing preferences
5. Whether you can take all this information and use it to create a meaningful campaign targeted to the right people, in the right places with the right message?

Taking all of this into account, perhaps the question should really be “is audience segmentation the holy grail for your authority?”

CACI specialises in understanding the demographic, lifestyle, health and behavioural characteristics of the UK population and their relationship to place.

CACI’s data products include a range of individual, household and postcode level classifications including Acorn, Household Acorn and Wellbeing Acorn as well as information on gross household income, disposable income, house prices, online activity and more.

For further information visit www.caci.co.uk or contact Stewart Eldridge, Head of Public Sector & University Data on 020 7605 6164 or [email protected].