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It’s easier to maintain 5 relationships than 500, so how do brands manage relationships when they have thousands of consumers they want to talk to? How do they ensure they are getting the right message in front of the right people at the right time? The only way in which to deliver a more personalised experienced to large numbers is to start breaking them down into groups. Segmentation is often the first step on this journey.  

What is Segmentation? Market segmentation is the process of grouping or dividing an audience into subgroups based on commonalities and shared characteristics.

How has this evolved? 

In the past segmentation relied on attitudinal data captured through focus groups or interviews which are then fed into a quantitative survey. Statistical measures help us understand how the attitudes and demographics clump together in segments.  

Today the proliferation of customer data means that we can build better segmentations because they’re based on data harvested from a range of sources. (e.g. social media, census, passive tracking of online behaviour) So we’re asking people fewer questions and using real behavioural or transactional data (e.g. purchase or loyalty data) which is more precise than relying on people’s memories or perceptions of what they do, which is notoriously inaccurate. 

A false start? 

While segmentation is hardly a silver bullet to all your problems, all too often it is rolled out and forgotten about after a few months. In order to have a lasting business impact it is key that senior stakeholders are involved in the process and that a practical action plan is made with both short term and long-term strategy. Segmentation should create a common language for everyone to easily relate to customers, and segments need to tie into existing systems, workflows and processes. 

Long-term Outputs 

Segmentation starts with defining customer groups and then should be applied to your ERP/CRM/Marketing systems. It is also important that segmentation is applied to your future market research. Insight Communities are a great way of taking different segments and doing extensive, long-term research. The key benefit being that as the context in which different segments interact with your brands changes and is influenced by outside factors, you can see the impact almost instantly. 

If you want to start the journey to customer closeness and need a segmentation programme be sure to check out our sister company, Bonamy Finch.  

If you are looking to see how that segmentation work can be expanded upon using an Insight Community then why not arrange a friendly chat?