2 Key Questions to Answer to Rock Your Next Segmentation
Have you ever witnessed a segmentation disaster or heard stories about one?
As we have written about before, segmentations suffer from a perception of much more unreliable and/or risky than other types of research. Marketers sometimes shy away from them because they are worried the segmentation may not work and they may lose credibility or end up feeling like they wasted their time and budget.
When we get hired for a new segmentation project, there always seems to be one or two people on the marketing team who say something like "we tried that at my old company and it was a disaster" or "I don't believe in segmentations". We often spend time at the beginning of segmentation projects talking through past bad experiences with these team members and figuring out what went wrong and why.
Most of these stories of past segmentation disasters we hear come down to a handful of major faults.
One of the most frequent implosion drivers is lack of alignment between the segmentation and immediate to mid-range decision-making needs. In trying to address a wide range of issues it fails to adequately address immediate tangible applications. You lose the opportunity to get quick application "wins" and generate needed momentum for applying the segmentation in other areas that are longer-term and potentially more meaningful.
Immediate and mid-range decisions must align with the strategic needs of the brand or company. You can broadly categorize these decisions and strategies into two main dimensions: product or communication:
- Product: You need to do a segmentation to make product development or product line management decisions. In this case, the decisions mainly center on making or changing products in a way as to maximize demand, revenue and/or profitability in a competitive marketplace for the product, the product line or other own-brand products. You want to enlarge the whole pie of company revenues or profits.
- Communication: You need to do a segmentation to figure out how to best position or communicate your products or to whom they should be targeted in your marketplace with existing products or services. You are not at the point or you otherwise do not have the ability or responsibility for product development or product line management. You are using what you have and maximizing the ability to better target into the marketplace.
You need to do a segmentation to figure out how to best position or communicate your products or to whom they should be targeted in your marketplace with existing products or services.
It is critical that you and your team are in alignment on the answer to this first key question; is this segmentation focused on changes to the product or to the communications strategy?
If you are focused on communications, the second key question you need to be able to answer is this: Are you focused on defining your target customer or positioning your product? Positioning is how we are going to market our product while targeting focuses on who we are going to market our product to.
Why are these dimensions so important? Depending on their priority, different kinds of data and approaches are needed. We won't go into detail about these approaches here. Let me just say this: You can use some approaches/data across in different areas. For example, you can use attitudinal work in situations of a high findability priority. To do this, we may use data fusion tools that link survey findings into larger databases to increase targeting findability. Murphy Research has developed several specialized tools towards this end.
Focus on making sure you and your team are aligned on these questions and you will rock your next segmentation.