Creating Value with Customer Segmentation

With so much media, technology, and numerous distractions surrounding consumers every day, it can be difficult to reach them. Understanding the different groups of customers that interact with your business—and tailoring a relevant message to them—is more critical than ever. Thankfully, with the amount of data available today, you can not only identify these unique audience segments but also discover what they share in common and how each engages with your brand.

This process, known as customer segmentation, isn’t just about sorting people into boxes. It’s a strategic approach that allows you to optimize marketing efforts and messaging. Arming yourself with information about who your customers are and what motivates them can guide product development, improve brand positioning, and help you customize campaigns and promotions with content and messaging that resonates with specific segments of your audience.

Discovering the details

You likely already have lots of information that can help segment your audience: sales or active user data, social media activity, web analytics, industry reports, etc. You should use all of this when preparing a customer segmentation strategy. But if you have direct access to your customers, you can ask them about their needs, behaviors, interests/beliefs, personality, and demographics to find out exactly what you need to know to develop a sound segmentation approach. As the saying goes, “Knowing is half the battle.”

Quantitative segmentation research: Surveys

Surveying your target population provides a quantitative understanding of your audience and helps set a baseline of demographics and key motivators. In addition, open-ended questions can capture qualitative details to be explored further.

Conducting a follow-up survey can also be helpful, to verify anything unexpectedly discovered during the initial research.

Qualitative segmentation research: In-depth interviews + focus groups

Interviews or focus groups with your customers can reveal deeper insights than surveys alone. Due to their open-ended nature and ability to ask follow-up questions on the spot, these qualitative approaches can unlock ideas that may not be revealed in a structured survey. Taking into account customer attitudes, motivations, and characteristics captured during qualitative research is imperative to a well-rounded segmentation approach that goes beyond baseline demographic information and purchase behavior.

Putting the personas together

After research is completed, the collected data is analyzed to identify common characteristics and patterns that indicate key differences between subsets of the audience. However, not all differences will be worthy of their own segment. To be useful, each audience segment should be:

• Identifiable: If a segment cannot be targeted, it doesn’t help marketing efforts.
• Viable: The segment should be large enough to target on its own.
• Distinctive: Segments need to have different behaviors or motivations to be useful. You might find “segments” based on age or income level, but, if no behaviors are distinguishable there is no need to approach them differently.

Once the actionable audience segments have been identified, it’s time to put together the different personas. These outline the universal values—motivators, mindset, goals, and challenges—that characterize each segment, along with any relevant demographic data. Now you are ready to put that information to work when planning and implementing product development or marketing activities.

For example: EPIC has conducted customer segmentation reports in multiple target markets for Barenbrug. Download the case study here.

As content customization and targeting become even more important and expected, make sure you know what your customers have in common—and what makes them different. Providing opportunities for each segment to engage with unique content and products most relevant to their needs will create a stronger connection with your customers.

Need help with customer segmentation? Reach out to EPIC to get started!