Segmentation research is best approached thoughtfully and with considerable planning in order to maximize actionable next steps. Research techniques used with segmentation go beyond just asking and tabulating straight questions. Segmentation can reveal ways to give lagging sales a boost or promote a service to target consumers who are already interested in it.

See how segmentation gave soccer a boost in this case study.

Whether your segmentation methods include clustering techniques, Chi-squared Automatic Interaction Detector (CHAID), latent class modeling, conjoint, max-diff or other techniques, you should always optimize your success with effective leadership, teamwork and a good process.

5 Tips to Ensure Strategic Segmentation

How can you avoid the fate of your research sitting on a shelf gathering dust? Here are five tips to follow to help ensure your segmentation doesn’t go unnoticed:

1. Determine Objectives, Learning Goals and Hypotheses

To truly get the most out of your market segmentation research, you want to start with your goals and objectives. Before you begin, understand what it is you are hoping to learn.

  • Set clear objectives. Objectives must be clear from the start and should serve as a guide post throughout the process. Be careful not to cover too much, some objectives may require additional studies in order to avoid respondent bias, confusion or fatigue.
  • Align your research goals with business goals. What is the role of the segmentation in business and brand strategy going forward? Be sure there’s clarity and alignment on how the segmentation learning will be used (e.g. product development, brand positioning, brand messaging, media placement, etc.). How you plan to use the research will make a difference in the survey design.
  • Choose your research methods. Determine whether a qualitative phase is necessary upfront to help guide objectives, form hypotheses and/or inform the survey. This is likely the case when minimal consumer learning is available as it helps maximize your segmentation investment.

2. Engage Stakeholders Early and Often

To ensure buy-in and ownership of results, engage these two types of stakeholders: executive sponsors and peers, both internally and externally. Give stakeholders a chance to contribute their perspective on project objectives, hypotheses and/or concerns.

  • Executive Sponsors:  it’s critical to ensure any segmentation initiative has an executive sponsor. This is typically the CEO, CMO or other executive leader. Here’s why:
    • Results of a segmentation are likely going to mean change – changes in thinking and ways of doing things from marketing communications and product development to sales. Change is always difficult for people but tends to be more successful if the executives at the top are engaged and supportive of the idea of change and the specific changes being discussed.
    • The role of the executive sponsor is to provide the influence, credibility and support needed for the change(s) to be successful. Whether the change requires a new product roadmap, a new brand positioning, or a new communication or sales tactic(s), the executive sponsor must be engaged and demonstrating their and the organization’s commitment to the change.
  • Internal Peers & External Partners: These are people from other internal departments or external vendors who will be involved in activating the segmentation results.
    • Internal peers may include marketing, sales, product development, R&D, finance departments, etc. and external vendors may include advertising agencies, marketing or sales consultants.
    • These groups will do much of the execution. Make sure to engage them, be aware of their concerns and learn about their hypotheses. Their input is critical as it will enable you to design, analyze and share insights in the context most likely to gain buy-in and support.

3. Engage and Collaborate with a Qualified Research Partner

  • Choose a research partner with segmentation experience.
    • Ask for case studies and challenges faced along the way.
    • Be sure they have designed, executed and analyzed several segmentation studies across industries and within a variety of categories.
  • Find a research partner who will:
    • Want to fully understand the project objectives and will bring up ideas and questions that you and your stakeholders likely haven’t considered – so be prepared for questions and be willing to take the time to help them deeply understand your needs.
    • Guide your team on the nuts and bolts of the research design, execution and analysis, including:
      • Developing discussion guides and/or surveys
      • Determining and executing the statistical technique(s) used to arrive at segment solutions
      • Identifying the best option(s) for the number, definition and names of segments
    • Provide a typing tool that can be leveraged in future research initiatives to help classify consumers into their respective segments. This is a very handy tool to help measurement segment performance after various marketing tactics were executed.
    • Aid your team in applying the learnings.

4. Optimize the final segmentation solution through the use of BOTH ART and SCIENCE

Segment solutions determined by the statistical analyses (the science) is the best place to start when beginning to identify the most optimal segment solution for your business. However, don’t stop there. Remember the “art” side of things which includes asking things like:

  • How well do the segments make sense in the context of your objectives and from a marketing actionable perspective? Let’s say your objective is around enhancing marketing communications. The statistical analysis shows a five- and a six-segment solution. However, the difference in adding in the sixth segment is based on a variable that doesn’t impact communication efforts. Because of such a minor distinction, you can likely combine these segments into one.
  • How relevant are the segments going forward? Perhaps something is likely to change in the near future making a segment irrelevant. If this the case, you may not want to base a long-term strategy on this segmentation solution.
  • Are the number of segments chosen manageable and of sufficient size? Having a segment that is 1% of the population is probably not a good idea as it’s not large enough to allocate resources to and see an effective ROI.
  • Are the segments reachable via marketing media? For example, TV advertising, print advertising, digital, etc.
  • How much intuitive sense do the segments make? Ideally, your segments should be easy to communicate and embraced by the broader organization.

5. Bring the segments to life and socialize within the organization

The more you help your organization understand and get excited about the segments the better the buy-in and support will be for them.  Some things that have worked well for many organizations include:

  • Naming the segments and creating a persona for each one
  • Conducting a qualitative consumer immersion phase to help bring the segments to life; this could include things like videos, photo’s, consumer diaries/journals etc.
  • Creating a collage or caricature showcasing the key segment differentiators

Are You Leveraging Segmentation Research?

If planned, designed, analyzed and managed properly, segmentation studies can be one of the most impactful studies done for a brand or business. By following the above tips, not only will your study be impactful, it will also lead to a rewarding experience for you and your team.

If you have more questions we would be happy to help! Contact us for more information about conducting a segmentation for your brand or business.

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