Why Most Companies Need a Whole Lot More Segmentation Marketing Research

And How You Can Leverage Segmentation to Outdistance Your Competition

You can’t miss the headlines, blog posts, and articles that are all telling you there is a deficiency in your life: you need to take more vitamin D, you need to drink more water, you need to spend less time on your smartphone. Most of the time, these warnings are followed up with advice on how to live your life.

Actionable Research is going on the record with our own deficiency warning: You likely need to perform more segmentation marketing research.

You may object and say, I (or my marketing department, research department, etc.) do plenty of segmentation marketing research. While that may be true, we have found most companies have not pursued a focused, objective approach toward deciding which segmentations of their customers, markets and partners they should perform. Neither do they leverage state of the art capabilities for this important effort.

If you are one of the few companies who have performed layers of segmentations on their customers, markets, and partners, then you can stop here and move to the next article. Although, even if you have, you may want to stick around to review the list of segmentations you can perform and the ways in which they may be meaningful. Or, keep an eye out for the rest of our series in which we will cover each of the different segmentation types.

I’d like to start our new Segmentation Blog Series with some background you usually don’t see - the what, when, where, why, and how on segmentation.


What is a Segmentation and What are the Types of Segmentations?

A segmentation is a means of grouping or categorizing populations or audiences of interest (the customers, markets, and partners mentioned above) in order to better understand their identities, behaviors, habits, needs and attitudes. Upcoming posts in this series will highlight each of these types and the critical details regarding each. 

Some of the formal names for these segmentations are:

1. Demographic and Firmographic Segmentations (Based on Demographics or organizational profiles (i.e., number of seats, employees, branches, etc.))

2. Behavioral Segmentation (Based on product usage habits, etc.)

3. Attitudinal Segmentation (Based on shared attitudes – what individuals think and how they feel)

4. Needs-Based Segmentation (Based on particular needs regarding their use of a company's products or services, etc.)

5. Adopter Segmentation (Based on willingness to purchase, recommends, etc.)


When are Segmentations Typically Created and Updated?

It is statistically likely there are many segmentations you and your company have not yet created or put to use that could benefit you and your customers. When these should be created and updated depends on the type of segmentation, but generally they should all be reviewed and potentially updated once every 18 months. Some need to be updated quarterly, and others only need to be updated every 3-5 years. In our next set of blogs, we will provide more details regarding the intervals where each type is optimally refreshed.


Who Performs and Utilizes Segmentations?

Segmentations are most frequently handled by marketing, product management, product development and sales functions within companies. We will be providing more details in our upcoming series of articles regarding how to best create collaborative segmentations.


Why is it Important to Segment my Populations or Audiences of Interest?

Segmenting (the process of developing segmentations for your populations or audiences of interest) is important because:

  1. Segmentation enables you to better understand how audience members are similar to each other;
  2. Segmentation enables you to better understand how audience members are different from one other;
  3. Segmentation, therefore, enables higher efficiency for marketing activities by allowing marketers to address their audiences with the right mix of messages and other communications.

In short, segmentation allows marketers to get customers’ attention, engage their interest, establish the reasons why they should use or prefer your products or services, create genuine desire for your products or services, develop new or improved products more effectively, uncover unique needs of certain audience members, and create customer and prospect personas.


How are Segmentations Generally Performed?

While some segmentations are easily developed by deciding simple criteria (such as male vs. female), others are very complex.

Most segmentations are created through a structured marketing research process that almost always involves a quantitative survey step, assuming the population is in high enough numbers to gather statistically significant results. Frequently, there are also qualitative steps such as one-on-one interviews or focus groups (either in-person or online) that are part of the segmentation development process.


More to Follow Each Week

Keep an eye out over the next 3 months. We will be updating our articles each week with new information regarding each segmentation type, including answers to the many questions posed in this week’s article. In no time, it will be very clear why segmentation remains the most underutilized tools in the marketer’s arsenal.