Segmentation

Segmentation: A fascinating process that, if conducted correctly, can be the driver of your business for a long time to come – we often see this being the research to kick off planning for the creation of a five-year plan.

This methodology blends your consumers’ emotional and attitudinal thoughts to both your brand and category and allows us to segregate them into more usable groups (or segments). We then complement this with customer data (where possible), something not all agencies do. To us, this can be a huge missed opportunity, as a segmentation must include solid use of customer data to ground the insights in your commercial reality. This allows a greater understanding of the finances involved – why guess at typical segment spend, when we can look at those you have already to generate a reliable view.

There are many reasons why we take this step, but one of the core elements that it brings to the table is that we can look at the customer base and understand which segments we currently attract as a brand. Then, we can develop plans that ensure we don’t lose our firm grip of particular segments and, if anything, continue to grow them. We can also look at segments that we underperform in, and we can explore the reasoning behind this. What is the brand doing that isn’t speaking to these consumers in the right manner? Ultimately, we examine what can we do to shift this perception to capture a greater share of relevant segments, defining the ‘art of the possible’.

So that deals with the customers, but the whole category drives the segments. As such, the bigger picture work comes when we look at the wider consumer base. By taking this step, we move from a place where we talk about consumers or demographics, and to something deeper, specific, and customised. Then, we can strategise about more thorough groupings of people. After all, now we know what makes them tick, what they would like from us and the clear steps we need to take to bridge the gap.

Often, the output of a segmentation will lead to a few core segments that can be focused on as the ‘low hanging fruit’, and then some mid-level segments that are slightly more difficult to activate so are best left for future plans. Finally, there is usually a segment (or two) that simply doesn’t fit that well with the brand. The benefit of this is that we move to a place of efficiency, as we know what we can do well and what we can’t. Therefore, the efforts can be honed and no time or resources is spent on an audience that is not the right fit for the brand (or even may end up being detrimental to the brand due to the cost of servicing them).

The endpoint of a segmentation is that a Client will be able to understand their entire category in much greater detail. This will also be backed by being able to drive more efficient and relevant communications with their customers. Ultimately, some segmentations can pay for themselves in efficiencies alone and the improved conversion rates on marketing. We received feedback from one particular B2B Client that managed to make the segmentation pay for itself in just two weeks!