You’ve Completed A Segmentation Study. Now What?
Leveraging Segmentation To Drive Business Results
by Felicia Rogers

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  Going into segmentation research, companies usually have firm plans, or at least an idea of how they will utilize the results.

  If a team is considering embarking on segmentation work without such plans, they’re probably not ready to spend the time or money required to make it happen. The last thing anyone wants is for such a significant research investment to fall flat for lack of planning or vision.

 

The good news is segmentation efforts are, more often than not, successful with the right vision and good planning. We need four key ingredients:

• A business outcomes-focused reason for carrying out the work
• A well-designed survey that asks the right types of questions (see Dr. Audrey Guinn’s recent blog, “The Top 5 Question Types To Include In Market Segmentation”
• An astute analysis leveraging both science (statistics) and art (intuition)
• At least one Activation Workshop to help ensure smooth integration into the organization
   

Focusing On Business Outcomes

There are multiple ways segmentation can be used to drive positive outcomes, and that’s where we’ll focus for the next few minutes. Here are some of the most common ways our clients put segmentation to work for their brands.

Messaging Strategy Planning. Attitudinal segments are ideal for guiding message and communication planning. A segmentation analysis that is heavily based on consumers’ attitudes about life, feelings about the products they use, needs they are looking to fulfill, and goals they are attempting to meet can be both intriguing and rich with content to motivate potential buyers. This is one of the most psychologically driven types of segmentation. We’re measuring the prevalence of something intangible, often subconscious feelings or opinions. More later on how we develop the list of items to measure.

Target Market Identification. Behavioral segments are especially useful for defining or streamlining a target market. Based on what we know about people’s shopping habits, purchase preferences, usage patterns, online behavior, travel patterns, etc., we can identify groups of consumers who are similar to one another. From there, we can see how our products fit into the lives of the various cohorts. This type of analysis is immensely powerful, as it begins to highlight behavioral tendencies that can be predictors of brand preferences and beyond.

Product Development. Consumer or audience segmentation often leads to new product ideas. When we understand how people cluster on various dimensions, we often get a glimpse into the types of products or services they use and any unmet needs they have. These “white spaces” (the unmet needs) represent opportunities for innovation. Because we already know a lot about the consumer from the segmentation work, targeting and messaging can be easily developed.

All of these types of market segmentation rely on a well-designed survey, as mentioned earlier. But how do we know what to include in the survey? What are the items that need to be measured?

A crucial step in the questionnaire development process is at least one stage of qualitative exploration. This is like the homework students do leading up to the final exam—they don’t just take the exam, but also must study and prepare carefully. Deep consumer explorations are needed to uncover the behaviors, thoughts, attitudes, feelings, and unmet needs that will help shape the survey. Many of these are hidden or not easy to articulate. At the beginning of the process, we don’t know what we don’t know. We have to do the homework of asking consumers about their lives.

Because the stakes are high and the process is complex, we developed the StrategicImpact™ process. This process helps guide us through the discovery, quantification, and profiling stages, as well as the beginning of an activation plan—each critical to end up with a useful segmentation that the brand team can leverage to drive business growth.

Segmentation work is one of the most interesting types of research because it can help define various aspects of a brand’s strategy. We would enjoy answering your questions or assisting you in segmenting your market.

About the Author

Felicia Rogers (frogers@decisionanalyst.com) is an Executive Vice President at Decision Analyst. She may be reached at 1-800-262-5974 or 1-817-640-6166.

 

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