Segmentations
thepeoplepartnership gets involved in lots of segmentation work. We specialise in the qualitative element of segmentation but frequently work with our quantitative partner in projects where the segmentation needs to be validated and measured.
We also often collaborate with clients to help disseminate and embed the segmentation within day to day working practices.
A flavour of the kinds of projects we have conducted in this area....
a) Segmentation development
Segmentation can develop in a number of different ways, eg
- Using an ad hoc study to elicit qualitative understanding as the basis for the development of different clusters, then using quantitative methods to validate and/or refine them
- Using an ad hoc quantitative study to generate different clusters and use qualitative research to put flesh on the bones
- Taking an established segmentation model and adapting it to fit using ad hoc qualitative and/or quantitative research
- Developing a segmentation in one or more pilot countries and subsequently rolling it out/adapting it to suit a wider range of markets.
The most useful qualitative methodologies tend to be mixed: so that attitudes and behaviour can be looked at from a wide range of different perspectives; to ensure that as many ‘real life’ elements are incorporated as possible; and to actually involve those who are going to be using the segmentation in the future.
Specific methodology mixes we use will, of course, depend on the variables of particular projects – especially available budget – but common methodologies involve some or all of the following elements
- Ethnographic interviews, ie spending extended amounts of time with individuals across different areas of their lives, eg leisure/work/family
- Extended creative sessions, ie bringing individuals from the same segment together to identify key trends/areas of agreement and how that relates to the particular organisation/product/service in question
- Pre-tasking journal exercises, ie where the individual records aspects of their life across relevant areas of interest via the written word/audio/video recordings
- Accompanied shopping trips, ie experiencing relevant retail outlets with different segments to understand/compare/contrast their attitudes/behaviour in detail
- Observation/on the spot interviews in client outlets to identify which segments frequent these and how they behave once there
- Longitudinal research, ie keeping in touch with individuals and/or recalling them across different phases of research
- Workshops, ie examining the implications of each segment for the client: eg how to influence behaviour and attitudes; generating new product/service ideas; developing the ideal retail environment/delivery channels etc
- Client participation, via passive observation and/or active participation in the process.
b) Communicating segmentations
The first hurdle after developing a segmentation is communicating it in a way that will help achieve buy-in across the organisation and help people understand it emotionally as well as intellectually.
Creating representations of each segment that illustrate very clearly what they are like and how they behave can be powerful, eg
- Edited video/audio footage of people from different segments talking about key topics of interest
- Mood boards illustrating the segments (to show how segments compare/contrast)
- Photos/diary entries/results of projective techniques from segments that have arisen from the research process
- A ‘bible’ that can be used as an ongoing reference document by the organisation with one chapter per segment, including macro lifestyle descriptions through to micro product/service needs by segment.
These have the benefit of being easily disseminated throughout organisations and needing minimal accompanying explanation. We have also found that it can be great to convene groups, recruited by segment, to illustrate to clients what individual segments are like in terms of who they are, and their attitudes and behaviour.
c) Using segmentations
The most difficult aspect of a segmentation is not developing or communicating it but using it afterwards.
A segmentation often cuts across organisational structures and traditional ways of thinking and operating, such that even if an organisation buys into a segmentation it may prove difficult to use.
A frequent initial barrier is working out how the current customer base falls in terms of the new segmentation. Often the differentiating criteria developed for new segments do not easily dovetail with existing systems/databases. Therefore, it is always best to be aware of this potential difficulty right from the start of a segmentation exercise so that the segments can, as far as possible, be developed around data that already exists (eg ACORN) or data already gathered by the organization (so that existing customer bases can be ‘re-cut’ to avoid starting from scratch).
Clients can usefully use workshops once they have bought into segmentations to help them think about their products/services from the perspective of the different segments. These workshops typically involve teams role playing to generate new ideas and ways of thinking for further development and testing.
Another barrier can be that a new segmentation does not sit well with the existing organisational structure, as teams may be set up to focus on specific products/services rather than segments. These structures do often need rethinking if a new segmentation is to be implemented and used on an ongoing basis.