The main reason they fail is because the very idea offends common sense. Here is how to avoid the very mistake your company made last time around.
What unites the best segmentations you have ever worked with? I am willing to bet that they were both modest and straightforward. I know this because useful segmentations always are. They did not call for a lunchtime training session, 200 slides, props on your desk, a role-playing game nor life-size cardboard cut-outs of smiley stock photographs giving you the thumbs up. They were obvious and made decisions easier.
So, what unites the worst? Without exception, they were all singing, all dancing and attempted to explain everything. To do this, they oversimplified to the point of inaccuracy. The moment they attempted to be something to everyone, they fell down.
As a rule, the result was a flawed mixture of naïve stereotypes and ideas that did not quite gel. Unable to differentiate on anything that mattered, everyone carried on regardless and swept them under the carpet. An indispensable approach to monetise and communicate data, humiliated; turned office taboo.
This happens because the idea that everyone fits into one of a handful of holistic groups that encapsulate all relevant information is unrealistic. Not only does it fail to ring true intuitively, it is debunked by data every single time. This is something social researchers accepted as rote a long time ago because it offends common sense.
Yet in some corners of market research, it is an offensive idea for quite the opposite reason. It seems to suggest that is not possible to develop a 360-degree view of customers. Profiling in minute detail is conflated with using the same level of detail to create segments.
Markets refuse to be carved up in a way that differentiates meaningfully across the entire business. A segmentation around which new products and services are developed or market share grown is of no interest to media planners. The CRM team know exactly what customers bought and where they live, but not what keeps them awake at night. No matter how you fudge it, the web analytics team cannot use what the branding manager or creatives need.
These people speak different languages, work with different data and pull on different levers. Unifying behind a single segmentation means every stakeholder must settle for a warped view, one which inevitably leaves a big ‘so what?’ in its ever so short wake. A reminder that segmentations do not suffer compromise.
They will continue to ignore our pleas for demographics, attitudes, system ones, twos, needs and behaviours to sit neatly together. This is because a segmentation can address either customers themselves or the situations in which customers find themselves. This circle cannot be squared.
Behaviour depends on the environment and differs according to occasion. Need states vary across the day. They overlap. All of which is more likely to be put aside in favour of the practical or social. No matter how much you are willing to torture the data, these things do not stick or swim together. They cannot. Not in a digital world.
Rather than drive toward the implausible, use segmentations as interchangeable lenses and only where appropriate. Free to discriminate on elements the business can do something about; each lens restricted to, and defined by the capabilities of the business and its possibilities. With this laser-like focus, we find ourselves back in the land of the bleeding obvious. Here there are no creepy cut-outs of customers, who don’t really exist and to whom you have nothing to say. Thumbs up.
I am a marketing scientist with 24 years of experience working with sales, media spend, customer, web & survey data. I help brands and insight agencies around the world get the most out of data, by combining traditional statistics with the latest innovations in data science. Follow me on Linkedin for more of this sort of thing.
