Why you need to embrace smart segmentation

You probably have more customer data building up than ever before. But do you know what to do with it? Our Senior Planner, Chris Moody, gives us the lowdown on how not to drown in data, but use it to create real returns.

Data, data everywhere and not a drop of insight to drink. That’s how it can feel for businesses that don’t have a truly relevant and considered data strategy.

It can be easy to fall into ‘analysis paralysis’, where you focus in on every detail of data sets, until you become unable to decipher which bits of information are relevant and which aren’t.

Sure, you might know that your customers are likely to drive a Nissan, but what does that actually mean for your brand of vitamins? By cutting away what doesn’t matter, you can better see what does matter.

The place to start

Smarter segmentation starts with one single question: What is your business problem?

Do you want to change perspectives? Strengthen your existing customers or attract a new demographic?

If you don’t know what your challenge is, then you won’t know what customer changes you need to cause. And without that, your data will only tell you the ‘what’, and not the ‘why’.

Once you’ve defined what it is that you want to change, you’ll be able to search through data sets for the right information to inform that. And your planners will be much better able to interpret the data into genuine insight that the creative team can work with.

Segments not stereotypes

One very common mistake businesses make is creating segments based on stereotypes. You might think you know who is engaging with your brand. But is your belief based on instincts or what you’d like be true, or is it based on the data?

An example of where this is especially true is programming. Who TV shows – and therefore adverts – are targeted at, are rarely the bulk of your real audience.

Netflix know this well. In 2017, they broke with tradition when they stopped segmenting audience recommendations by region. Instead, they started segmenting into ‘taste communities’. They realised that, largely, people in Barcelona and Bangladesh have the same likelihood of watching a show. It’s not about where they are, but who they are.

And an even more powerful trap that we must resist falling into is age stereotypes. These mythical Millennials and past-it 60 year olds don’t exist as demographics. We need to focus on more attitudinal factors, as they’re more likely to inform decision making.

Back it up

Your data sets are important, of course. But in order to really bring your customer segments to life (and to check that you were actually right about them) we need to engage with the customers or potential customers.

Yes, get out there and speak to real people who fit your demographics and find out what they’re all about. In our marketing echo chamber, we like to think we understand people. But because of the nature of what we do, we imagine products and services hold much more importance for people than they do.

Your data analysis might tell you that your young customer shops at Pret A Manger. Marketing types might assume she’s very ethically minded and choses Pret because of their community outreach projects and eco-friendly goals. In reality, it’s actually just round the corner from work so it’s the quickest way for her to pick up lunch.

Only by asking her, does the data make sense. Finally, you can get closer to that customer.

Let’s get smart

We’re experts in smarter segmentation and getting closer to your customers and prospective customers. If you want to hear more about how we can help, please drop us a line.

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