- Tony Quin
Like most companies, you probably have a solid idea of the composition of your consumer audience, but for the purposes of marketing, we need to have a very clear picture of consumer segmentation, which is to say the relative importance of one vs. another, how to prioritize and why, plus the behavior profile of each.
For those of you new to consumer segmentation, it is exactly what it sounds like: segmenting the consumer market for your products and services into groups. These groups might be divided by age, or usage or some other characteristic. The important thing is that the reason for the segment should be important to the brand and a defining characteristic. Consumer segmentation is critical because most companies have more than one target audience and each behaves very differently from one another.
Consumer segmentation also lays the groundwork for the kind of data profiling that will only become more prevalent as these data technologies get more accessible to companies of all sizes. This allows companies to use behavioral data to inform profiles of different target segments. If people in a segment tend to workout regularly, you might infer that everyone with that same behavior profile is into fitness. Famously, Target inferred that a teenage girl was pregnant based on her buying behavior. When her father complained that the company was encouraging his high school daughter to get pregnant with coupons for baby clothes, a manager apologized profusely. A few days later when the manager called to again say sorry, it was the father’s turn to apologize. He explained he had spoken with his daughter, and she had admitted that she was, after all, pregnant.
Segmentation can be by geography, demographics, behavior, lifestyle, frequency of use and much more. The process of conducting a consumer segmentation study should actually show where clusters of similarity exist and in doing so may reveal hidden opportunities. This work should be data-based vs. informed guessing. Industry focused studies are available for purchase, but often they are too broad for the specific needs of one product or services category. Coming out of a segmentation study, a company should be able to identify which discrete segments it makes sense to pursue. Clearly many considerations factor into these decisions such as the size of the market, growth potential, value, maturity, competition etc. Much of the other research you have gathered, and your business goals, will help, but a judgment is called for before we go on to the next step of creating personas. The idea is to get down to a manageable number of segments, often three to five. Too many will spread your efforts too thinly, and create operational problems down the road.
Consumer segmentation is great and valuable, but a sheet of numbers is not enough for a customer-oriented organization. It’s too easy to forget that your prospects and customers are flesh and blood people and not numbers to be counted. So to bring the reality of your target audience to life and keep it alive, not only for our marketing teams, but also for every person in the company, you create personas.
Personas are simply profiles of the typical person in a segment. The idea is to help you and your teams internalize the emotional reality of the target consumer you are marketing to, and relate to them as human beings. There may come a time when your marketing bot is selling to their buying bot, but we are still quite far off from that. If you are selling to people, your brand experiences will always have to be this mushy mix of analytical and emotional elements, just like people. Personas help you get, and keep, the mix right. Be sure to define your personas by age, gender, location, education and family, as well as by, goals and challenges, values and fears. To cap it off, it’s also helpful to have a visual of the persona, and an encapsulated pitch that would resonate with them. Each persona will help guide you through the subsequent steps in the planning and execution process.
Once you have them, spread your personas widely through your organization and bring your customers to life for your people in any creative ways you can. Some companies create persona rooms, or spaces designed to reflect the life and preferences of a persona. Staff can go there to immerse themselves in the images and emotional icons of a particular persona and hope for empathy and inspiration. Personas work. Forrester studies indicate that planning with personas actually improve the effectiveness of critical initiatives by as much as 400%.
This article is part of a larger series, Decoding Modern Marketing, that aims to help executives understand the value of marketing in 2016 and create a plan for achieving measurable results.