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The 5 Keys to Successful Segmentation

Posted by Brant Cruz on Mon, Jun 17, 2019

SegmentationIn a world of constant change what can we truly count on?  For me it’s death, taxes, the fact that the Patriots will be playing football long after my beloved Chicago Bears have gone home, and another topic close to my heart: The 5 Keys to Successful Segmentation. 

While the 5 Keys to Success are evergreen, new data sources, empowered consumer behavior, digital disruption, globalization and 24/7 connectivity all impact what it means to build a successful Segmentation. Pair this with a growing consumer obsession with immediacy and personalization and you have brands facing a greater need for consumer-centric market strategies than ever before.

In the next couple of weeks my colleagues and I will share what we’ve learned over the course of conducting nearly 200 successful Segmentations. To start us off, I’m sharing the five critical success factors that ensure our clients not only build a true understanding of their target consumers and how to engage them but to also drive real strategy across the organization—including resource prioritization, marketing messaging, product development and innovation.

Key Success Factor 1: Focus on business decisions from the start

Segmentation is likely one of the largest investments your insights team will make—there isn’t room for failure, much less mediocrity. But, if your stakeholders aren’t engaged, invested, and aligned from the outset, you’re dramatically increasing your odds of failure. This is the opposite of the purpose of Segmentation (see below on Segmentation and Unicorns).

A clear focus on business decisions—communicated from the start and serving as guardrails throughout (and beyond) a Segmentation initiative is key.

Successful brands start by asking and answering questions like: How must this Segmentation support our organization’s goals?  Which specific business processes does the Segmentation need to dovetail with to be actionable, and what connective tissue do we need to build in to make that possible? Are we prepared to truly prioritize one or a small set of segments for better success at the risk of being sub-optimal with others if we can make a case as to why? How much complexity can we effectively handle (e.g., more segments, a matrix of segments) versus a need for a simple, unifying lexicon? 

These brands work with partners (cough, cough) that truly understand your business needs, clearly outline objectives, lay the groundwork, and design questionnaires that directly answer hypotheses. It may not be sexy, but I’ve picked up the pieces of competitive Segmentations and ignore this at your own (and your team’s) peril. You must: engage early and often!

We leverage several proven tools to inspire action and focus from the onset, including:

  • Stakeholder interviews—understand executives’ objectives and expectations
  • Lift-off workshops—identify success criteria
  • Business Decision Worksheet—to tie decisions and hypotheses to the questionnaire

Key Success Factor 2: Account for a wide range of influencers

Look around, consumers people are complex, but traditional frameworks just don’t account for that complexity anymore. Part of the art and science of Segmentation is considering these diverse attributes: motivations and drivers, product preferences, future goals, needs/barriers, beliefs and perceptions, habits, and of course behaviors. A strictly attitudinal-based (or behaviorally-based) Segmentation is always sub-optimal in today’s marketplace.  Age and gender Segmentation have never been less relevant. 

For example, later in this series, my colleague Dr. Erica Carranza will share more about our proprietary Habit Loops Segmentation framework—an approach that delivers more nuanced marketing, communications and product development implications vs. Segmentations based on behaviors alone. Understanding the psychological motives, attitudes and values that drive behaviors can help uncover strategies to activate segments—promoting desired routines and revealing opportunities for disruption.

Key Success Factor 3: Anticipate trade-offs

Segmentation schemes have strengths and weaknesses—there are no silver bullets and it’s nearly impossible (okay actually impossible) to satisfy everyone’s wishes.  If you see an agency promising to deliver anything resembling perfection, avoid them!  Perfection plus Segmentation is a unicorn.  Segmentation is not about perfection, but about increasing your odds of success at the individual level, by having a way-better-than-coin-flip hypothesis about their relevant segment and applying treatments that will yield materially better results than a vanilla product or message

The best schemes will balance those business needs with practicality. This is where the real art comes in—evaluating the trade-offs and making an educated and calculated recommendation for a path forward.

Key Success Factor 4: Leverage existing resources

Most, if not all, of the companies we work with sit on troves of customer data that—when harnessed correctly—provide powerful insight into existing or potential segment groups.  How big a role various forms of “big” data can and should play in any assignment should be drive in roughly equal parts by the three keys above, and the quality of the data your company owns and/or can access.  Coming soon, my colleague Dr. Jay Weiner will discuss some of the technical aspects of marrying survey data with other data sources to complete segmentation missions.  No need for me to try to communicate those complexities concurrently; those of you with sharp data chops know that I’d be a poor surrogate for Jay anyway, right neighbor?  (How was that for a little data geek humor?)

Key Success Factor 5: Empower decision makers to act

The most sophisticated Segmentation scheme will collect dust if it’s not evangelized throughout the business. As I shared in Key Success Factor 1—a laser focus on decisions and getting buy-in from stakeholders starts at the very beginning and must be rigorously pursued throughout.

We keep insights fresh and meaningful, and stakeholders engaged by drumming up excitement and bringing segments to life across the organization.

Our strategic qualitative team draws from a comprehensive toolkit, combining traditional with agile and cutting-edge strategies to foster active participation and build enthusiasm. We frequently leverage activation and socialization workshops, persona development (more on this to come), as well as creative deliverables and immersions.

But it doesn’t stop there. Segmentations are living, breathing frameworks—and should be treated as such. The work doesn’t end when the workshops are over. We help clients realize the potential of these powerful insights and empower executives across the organization to advocate and build empathy for these customers (or prospects, depending on who you’ve segmented). The use for Segmentation extends well beyond marketing and we help executives realize the full potential.   

And even that ending is a new beginning.  Once business leaders have bought in, Segmentation enters the realm of learn>test>re-learn.  Seeing segments come alive and become accessible to researchers and non-researchers is one of the most fulfilling parts of my job, but it doesn’t happen all at once—it takes careful planning, a great team, and experience.

You’ll be hearing more about these key success factors in the coming weeks but you don’t have to wait to learn more, let me know your thoughts in the comments or shoot me an email and let’s chat.

Brant leads CMB's Platforms and Digital Media Practice. 

Learn how we helped Netflix create binge-worthy insights with A Global Segmentation with—and for—UX Designers.

Check out the case study

 

 

 

 

Topics: market strategy and segmentation