In the current competitive market landscape, understanding your consumer base is not just an advantage—it’s a necessity. The traditional methods of market research are evolving, and segmentation has become a pivotal part of developing a nuanced marketing strategy. Drawing on the insights from hundreds of segmentation projects over the past 25 years, I’ll explain why segmentation is crucial to your marketing strategy and how to implement it effectively.
If you’re in the business of market research or a marketing leader, you’re likely familiar with the challenges of parsing through data to create meaningful consumer segments. Like a brand tracker, a segmentation initiative can easily fall into the trap of stale practices if not carefully managed. That’s why it’s essential to engage in a process that is as dynamic as the market itself. As segmentation practices have matured, so have the Do’s and Don’ts that guide the process towards effectiveness and away from obsolescence.
Do’s
- Embrace inclusivity in segmentation development. Having marketing, product development, sales and leadership at the table ensures that the final segmentation is attuned to how primary users will apply it to decision-making and strategy implementation.
- Forge a close relationship with your research vendors. Regular workshops and meetings foster a deeper understanding of your company’s unique culture and needs, leading to more tailored, effective and ultimately usable segmentation.
- Grasp the full scope of your market. Whether you’re segmenting B2B software buyers or soda drinkers, a clear and slightly broader definition of your market lays a strong foundation for segmentation.
- Aim for segmentations that are easily identifiable and describable. Bring your segments to life with the help of creative partners to make them more vivid and understandable.
- Assess both the population size and the potential value of each segment. For the most reliable insights, make sure the sampling is representative and grounded in accurate data.
Don’ts
- Resist the urge to rush. Much like fine-tuning brand tracking programs, the segmentation process is iterative and requires patience to refine and ensure its utility.
- Avoid complexity at the outset. Starting with a manageable number of segments can prevent overwhelm and maintain focus.
- Steer clear of relying solely on AI or behaviorally-based (Big Data) segments. Enrich these with qualitative human-based insights to understand the driving forces behind consumer behaviors.
- Don’t work in silos. Cross team collaboration and shared insights are crucial in steering the direction of the segmentation process.
- Never overlook the importance of validating your segments. Repeated qualitative and quantitative surveys are essential in fine-tuning your segmentation tools, akin to proving the ROI of brand investments in tracking programs.
Segmentation in market research is both an art and science and needs to be finely tuned to the nuances of your market and changing dynamics of consumer behavior. It requires investment in understanding not just the ‘what’ but the ‘why’ behind consumer choices.
It’s evident that segmentation is not just a static part of market research—it’s a strategic tool that, when used effectively, can propel your marketing efforts to new heights and, indeed, transform the performance of the brand itself.
Hemispheres helps brands understand their customers as well-rounded individuals. It’s an approach that we call Research for Humans. Let’s continue the conversation…reach out at hello@hemispheresinsights.com
Lynn Reed, Partner
Lynn Reed is a Partner at Hemispheres. With a background in marketing and mathematics, she excels in creating actionable strategies for clients, drawing from research insights and analyses such as customer segmentation and choice modeling. She is an internationally recognized market leader, coach, consultant, and speaker. She has 25+ years of experience in helping companies understand their customer’s needs, motivations and aspirations leading to successful outcomes.