In our prior post (see Segmentation: Efficiency vs. Effectiveness), we discussed how segmentation has become more efficient over the years but not necessarily more effective. In this post, we’ll identify three keys to effectively segment your target audience. Each is geared toward bringing the segmentation to life so that it contributes more business value.
Key #1: Start with the End in Mind
From project inception through delivery, the business must choose between a variety of inputs, potential solutions and envisioned outcomes. Each of these decisions adds to the success—or failure—of the end product. Decisions made without the proper context, however, can be far from optimal. Thus, it is absolutely essential to understand who will use the segmentation, what will they do with it and why. Keeping the end in mind ensures decisions are framed within the right context and for the right reasons.
Key #2: See Through Your Customers’ Eyes
All too often, segmentation solutions are constructed from a myopic viewpoint. Marketing myopia was first defined in a classic 1960 Harvard Business Review article. It is a “nearsighted focus on selling products and services, rather than seeing the ‘big picture’ of what consumers really want.”
Applied to segmentation studies, marketing myopia occurs when segmentation attributes are determined using an inside-out approach that puts the brand front and center. Unsurprisingly, myopic segmentations lead to a distorted view of the market, as they are centered on the company rather than customer—much like the dark ages, when the predominant belief was that the Earth was the center of the universe, everything spinning around it.
Ideally, your customer is the center of your universe. Most certainly, you are not the center of hers.
In its proper form, a segmentation study should be designed as seen through your customers’ eyes. Using such an outside-in approach, attributes are determined by how your customer views the world and, critically, your brand’s place in it. Qualitative research, such as ethnography or a digital diary, is a great way to capture your customers’ perspectives.
Sometimes, business stakeholders assume they know what the customer wants, speaking on her behalf, and avoid this step. However, segmentation studies are too important to be built on assumption. Assumptions are a lot like quicksand: innocuous to look at but deadly to step into.
Our counsel: don’t be myopic and don’t assume. Rather, step into the shoes of your customer and look at the world from her eyes. What do you see?
Key #3: Team Up
Done right, segmentation is an inherently cross-functional endeavor because it informs how the business, as a whole, views and engages customers. As such, it is important to include stakeholders across all relevant functions in the process early and often.
Starting in the formative stages of design, it’s important for stakeholders to understand the need for qualitative research to develop a customer-driven set of attributes, which will serve as the basis variables for the segmentation. By engaging them early on, you get the added benefit of buy-in.
All too often, a company invests significant time and money into a segmentation initiative, only for management and other stakeholders to not believe in the results and, therefore, not use the results to drive the business. By including others in the process early, people will feel a sense of ownership. They’ll buy in to the design and process, making it far easier for them to accept the final results and, ultimately, act on the information.
Collaboration ensures the right people are involved throughout the process, from design through definition and delivery. This way, the right decisions are made at every step. This also serves to maximize buy-in and builds a sense of ownership, across stakeholders.
At Bellomy, we will not undertake a segmentation study unless the full team is engaged from beginning to end. Without this level of collaboration, the segmentation will almost certainly be doomed from the beginning. And we don’t like to deliver doom. We much prefer to deliver success.