So, you need a segmentation?
Aside from the philosophical arguments from those such as Byron Sharp and Mark Ritson around whether marketing should target specific audiences or build brands via mass appeal, many organisations find it useful to create a segmentation of their customers and potential customers.
This can be a vital component of good product and service development, marketing and communication. Let’s face it, not all brands are for all consumers.
In order to get further than a suspect, quickly thrown together set of personas, you might consider research in order to apply some rigour and evidence.
In my view, however, be careful about how much you let the data lead you and how much you lead it. These are my top tips for a successful segmentation, roughly in order of importance:
Make it simple
Any decent segmentation is ‘owned’ by everyone in a business and not the research or marketing teams. So many really robust and rigorous segmentations fall apart the moment they leave the research departments door because the rest of the business find it impossible to understand them and so can’t relate to them or use them. If you use overly sophisticated methods to create your segmentation you had better be able to explain this to everyone in very simple terms. If you want to give your segments fancy marketing names, then be prepared for some push back.
Start with the end in mind
What are you going to want to do with this segmentation? Develop products and services? Create better marketing communication? It’s important to consider this now rather than get caught out later. For example, to effectively market to a sophisticated segmentation born of high-level statistical analysis is made difficult if the media channels you use mean you are limited to buying basic demographics.
Engage people… now
Tell people you’re doing this and you want their input. Don’t tell them you’ve done this and they have to start using it.
Which parts of your business are going to be using this segmentation? Marketers and product managers? How about customer service agents? If you want the segmentation to be really effective you need to engage those who you are expecting to use it ahead of time. Get their buy-in, use the latent insight they already have about your customers and build that in to the data.
Allow your segmentation to be integrated into other data and research
Think about the most valuable data-streams you use within your organisation – your sales data, your brand tracking, your analytics and web traffic. Can your segmentation be easily integrated into these streams? If not, can you make this so by adapting your segmentation or simplifying it? Think how much more powerful it will be if it is fully integrated into the data that the business uses and values the most.
If you carry out qualitative research, can you easily recruit participants based around your segmentation? If your segmentation relies on sophisticated analysis and a whole bunch of attitude statements then you might find it hard to create ‘golden questions’ from which you can recruit people.
For all of the reasons above, you need to be willing to listen to others in the business, use their reactions and reservations to make your segmentation more water-tight.
Keeping the process simple will ensure the results are more easily understood, more easily adopted and therefore far, far more effective.
If you would like to discuss your plans for a customer segmentation, please get in touch as I would be happy to help.