Segmentation Strategy: Rules to Live By

Customer segmentations can help drive strategy across your organization – but only if your project will translate into actionable results. Segmentations help brands better understand their audiences and prioritize marketing investments by organizing customers or moments into subgroups with common characteristics.

There are two main branches of customer segmentations. People segmentation looks at consumers’ feelings, behaviors, and needs and is used for categories (such as insurance) that rely on long term choice patterns. Moments segmentation focuses on specific experiences and explores how consumers act, for example, when spontaneously choosing an alcoholic beverage.

After years of creating customer segmentation frameworks for both category disruptors and industry giants, our experts have codified a set of rules for designing segmentation studies that enable businesses to move forward.

When it comes to customer segmentation, better inputs lead to better outputs.

The more upfront diligence, qualitative insights work and collaborative scoping you can invest into the front end of your segmentation, the richer the rewards. At Kelton, we ensure that every survey input is strategically created and selected. This process guarantees a foundational segmentation that fosters enhanced communication with priority customers. We’ll help you create customer segmentation frameworks that reflect your organization’s priorities and effectively drive business decisions.

Start with the end in mind.

Segmentations are a business strategy tool that should drive merchandising, marketing, and brand experiences. It’s important to dedicate as much time and resources to the back end and segment strategy development as to creating the segmentation itself. We’ll begin by understanding who in the organization will be using this work, and for what purposes.

Embrace multiple data streams.

The days of pure attitude-based, survey-derived segmentation are over. Today, the best segmentations fully integrate client databases, append third party data or incorporate CRM insights to render the segmentation more useful. Such a market segmentation strategy aims to find the perfect mix of behavioral and self-reported inputs.

Collaboration starts on day one.

Since client involvement is crucial during segmentations, we immerse your team throughout the project. We help you understand your customers and shape the research results by using an iterative review process to develop the final segmentation architecture.

The ultimate test of segmentation strategy? It’s all about how you activate.

Segmentations are only useful if they lead to meaningful action. We begin with a clear segment prioritization based on business opportunities and continue through strategy building and creative brief writing. At the end of the process you’ll have a detailed roadmap featuring specific activation tactics that will enable you to best utilize the segmentation findings and move your business forward.

Click here to learn more about Kelton’s segmentation approach.