A segmentation study is a valuable tool in any marketer’s arsenal. It helps organizations to bucket and prioritize subsamples within a market to drive category growth. The end-goal is to develop a consumer-led growth plan grounded in high potential targets with a strategy on how to win with each target. Segmentation studies easily pay themselves off as they:

  • Create a company-wide focused action plan on how to win with key target groups
  • Rally the entire organization around the highest value consumer targets
  • Enhance innovation pipeline developments by focusing on clear targets
  • Improve media purchases by enabling more targeted media buys

Unlike mass marketing which targets everyone or 1:1 marketing which has prohibitive costs, segmenting a population enables marketers to view large masses of people as smaller, distinctive groups that share common traits. It enables empathy-based marketing. It also helps marketers to generate clear answers to key questions such as:

  • Who must we win with
  • What will we be known for
  • How will we win

A successful segmentation that is predictive of spend and behaviour follows four key principles.

  1. Best in Class Inputs: Using the same inputs from the same questionnaires and data collection tools from years and decades past will not yield new learnings and insights that are relevant to today’s market and tomorrow’s future. Questionnaire inputs must be future focused, innovative and sourced through multiple qualitative methods such as focus groups and interviews, facilitation workshops, and a frank understanding of the future of the business and industry (Check out our proprietary Disruption Audit tool). A great segmentation study is not only a reflection of the market today but a map of where the brand will want to play in the future.
  1. The Right Method: There are many segmentation methods to choose from. They can be based on behaviours, demographics, psychographics, geography, lifestyle, usage, purchase data, and other relevant distinguishing characteristics. In order to drive growth, it is important to gain an expert understand of the advantages and disadvantages of each method before selecting the type that will work hard for you.
  1. Easily Digestible: With the data collection and statistical analysis complete, the next stage is to translate complex statistical relationships into easily understandable outputs. The storytelling process can include literally stories, or images, infographics, and video. Videos are worth more than 1000 words making them an excellent complement to the research outputs. They can portray powerful, immersive stories about each segment which will help to quickly ingrain each segment in the minds of everyone in the organization. And, by incorporating insights from qualitative research, each segment can be further illuminated, just like watercolours, to present the complete picture of the target by filling in the colour, and adding depth, shading, and contrast. We need to remember that consumers are not just data points – they’re people with stories and interesting quirks. In the end, bringing the results to life requires great storytelling.
  1. Drive Action: Lastly, a segmentation study that lands in the file drawer serves no purpose and is a waste of money. It must drive action. As such, the insights and resulting story must galvanize key stakeholders and connect directly into a clear strategic plan that will kick-start transformation.

Done by experts, segmentation generates high return on research investment (RORI). Having a clear understanding of your high potential segments will impact every aspect of the marketing and advertising role. If I had only a small budget but needed game-changing insights, I would ‘bet the farm’ on a segmentation study.