A truly commercial customer segmentation model can have a significant impact on rates of customer conversion and retention as well as market share and / or profitability.

B2C and B2B segmentation models ascribe customers to individual segments based on a range of common criteria likely to include demographics, needs, attitudes, or behaviours.

However, some models, whilst highly insightful, are resolutely uncommercial because they don’t enable the customers within the individual segments to be identified, targeted or measured easily.

Brandspeak focuses on creating segmentation models that:

Contain segments with negligible overlap.

Enable easy identification and targeting of ‘must succeed with’ customers i.e. the most valuable, the most vulnerable.

Enable tailoring of the brand’s offer (proposition, product, service, communication, channel delivery and price) to priority groups in order to meet their needs more closely.

Enable the segment-specific impact of targeted and tailored initiatives to be measured and compared.

can act as a diagnostic lens through which to review business and operational data (e.g. sales or customer satisfaction), identifying issues and opportunities that might otherwise have been missed.

In reality, the segmentation model that works best for your organisation is likely to reflect shades of each of the 3 most common segmentation models outlined below:

Demographic segmentation - a segmentation model based on demographics is the most simple and straightforward segmentation model of all, as it uses readily identifiable data such as age, sex and socio-economic status.

Usage segmentation - this term refers to a behavioural segmentation model based on how (often) the customer interacts with the brand by (for example) visiting the store, going to the website, making a purchase or consuming the product.

Attitudinal segmentation - this term refers to a model that is based on what consumers think about the category in question. An attitudinal segmentation model enables the organisation to target consumers based on what they think and feel, rather than simply on (for example) how old they are or where they live.

Typically, our approach to segmentation model development is both qualitative and quantitative in nature. Firstly, we combine qualitative market research with a Usage and Attitude (U&A) survey to determine the most appropriate criteria for the segmentation model.

Following this deep dive, we’ll put one or more segmentation model forward for testing before selecting the most insightful and commercial solution.

Brandspeak are specialists in Customer Segmentation and Usage and Attitude surveys. For more information about our services please get in touch or call: +44 (0) 203 858 0052

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