Segmentation Video Series: Episode 06
Segmentation: Solution Criteria
Segmentation: Episode 06 Transcript
Hello, I’m Beth Horn, head of the Advanced Analytics Group here at Decision Analyst, and I’m here to discuss how to choose the best segmentation solution.
Some general criteria for useful segments include: segments should share more commonalities with each group than they do between groups, segments should also be large enough for organizations to mount cost-effective campaigns, and segments should be reachable through most media avenues.
I also suggest that segmentation solutions should consider linking those segments to important market outcomes. It is vital to understand which key metrics are important to stakeholders and craft a plan to include those metrics. Such results can help a company determine which segments to target first (groups who are likely to purchase the product for instance), and how to communicate with them.
So, when deciding upon a final solution, companies often wonder how many segments should I have, 5, 6, 10, 15, 20? There’s not a magical number, I’m sorry to say. Companies that advertise using mass media, for example, will lean toward fewer segments. Companies that use direct mail or email marketing may use many, many, many segments, because it is relatively inexpensive and easy to market to all of them. A service-oriented industries, such as hospitality and foodservice, tend toward many segments as well, because not only do they have to account for the consumer, but they must account for the day part, the usage occasion.
So, although there can be a great deal of sophistication in the analysis stage, segmentation is not a purely scientific pursuit. Sadly, there are no magic buttons to press to generate the best segmentation solution. So, given that the data have been modeled the most appropriate way and the basics are addressed, category experience and expert judgment are the final guides to selecting the best segmentation solution.
So, thanks for watching and please be sure to check out our next video: “Uncovering Motivations.”
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Segmentation Series Videos
- Episode 01: Introduction to Segmentation
- Episode 02: Why Segmentation's Sometimes Fail
- Episode 03: Types of Segmentation
- Episode 04: Exploratory Qualitative Research
- Episode 05: Design Considerations
- Episode 06: Solution Criteria
- Episode 07: Uncovering Motivations & Key Drivers
- Episode 08: Understanding the Segments
- Episode 09: Persona Development
- Episode 10: Geomapping & Micromapping
- Episode 11: Using Segmentation in Strategy
- Episode 12: Applying Segmentation to Marketing Communication
- Episode 13: Applying Segmentation to Direct Marketing
- Episode 14: Applying Segmentation To New Product Development