Advanced
Segmentation
Divide and conquer
The Market Intelligence Co. works with you to develop tailored segmentation strategies, combining traditional demographic and firmographic analysis with advanced behavioural, needs-based, and psychographic segmentation techniques. Understanding organisations’ varying roles, needs, and purchasing behaviours is also essential in B2B and industrial markets.
Benefits of
market segmentation analysis
Essentially the advantage of taking a segmentation approach is that individual segments can be targeted more effectively, resulting in better outcomes and more efficient allocation of resources.
Prioritisation of the best opportunities
Understanding the needs and perceptions of the various segments within your target market allows you to determine which of them represent the better opportunities.
There will almost always be some types of potential customers who are more aligned with what you are offering and giving them a higher priority will deliver better results.
Targeted sales and marketing
Once you understand the various segments within your total or customer market you can adopt specifically targeted sales and marketing activity. This means utilising different approaches based on the individual needs and characteristics of each segment.
More efficient resource allocation
Within a market segmentation approach resources are allocated where they can be expected to deliver the best results. It is quite likely that some segments will not be addressed at all, leaving greater sales and marketing resources to be devoted to the highest potential subgroups.
Develop products and services that meet the specific needs of your target audience
A deeper understanding of different customer groups can identify opportunities to develop or refine products and services so they better meet the specific needs of your target audience.
Competitive advantage through tailored solutions
Segmentation can help identify where your organisation is particularly well placed to meet the needs of a specific customer group. Tailoring your offering and messaging around those needs can provide a meaningful point of difference from competitors.
Enhanced customer retention
By appreciating the needs, preferences and attitudes of specific customer segments you will be able to take a more personalised approach. From the customer perspective it will seem that you really understand them and talk to them in their own language, resulting in their assessing the relationship as more valued.
One size doesn’t fit all
Types of market segmentation
There are a number of different, sometimes complementary ways to go about defining market segments.
Geographic and firmographic segmentation
Geographic segmentation and firmographic segmentation are perhaps the simplest approaches. They segment the market by location or by the basic characteristics of a business such as size, industry or customer category profile.
Behavioural segmentation
In behavioural segmentation, businesses are segmented according to how they operate. Behavioural aspects evaluated could include their purchase decision making process, the nature and level of key decision makers, the way they are likely to use your product/service or how they interface with their own customers.
Needs based segmentation
Businesses, like people, have culturally based needs which can be used as the basis of market segmentation. Such needs could include the need to be seen as a market leader, the need to embrace innovation, the need to maintain a low risk operating environment or the need to be seen as environmentally sensitive.
Psychographic segmentation
Most commonly used in consumer segmentation, psychographic segmentation can have applications in the B2B space. It essentially uses aspects such as corporate personality, attitudes and values as the basis of analysis.
Some of the types of variables that could be relevant in this area include the extent to which an organisation is cost driven, the degree to which it is actually customer focussed (as opposed to simply claiming to be), the level of aggression with which it pursues profit or the degree of pride it takes in staff retention.
Demographic segmentation
Demographic segmentation groups individuals by measurable characteristics such as age, gender, income, education or occupation.
In B2B research, relevant characteristics can include education, gender, age range, tenure, industry and role or position within an organisation. These factors can be useful in understanding how different decision makers and influencers vary in their needs, priorities and behaviours.
Market segmentation analysis process
There is no universal method of approaching a market segmentation exercise, but there are some underlying guidelines that inform a sound segmentation process.
Define the total market
The starting point is to define the total market being addressed and establish which customers, prospects or organisations fall within the scope of the segmentation. This provides a clear foundation for developing a segmentation approach that is relevant to the market the client needs to understand and act on.
Accumulate information and data
This is probably the most important part of the process. Successful segmentation will depend entirely on the extent and quality of the information on which it is based. It will be beneficial to analyse existing customer data and complement that with broader market analysis and the results of formal research and surveys. Much of the information about behaviour, needs and corporate cultural values can only be obtained by interviewing decision makers and influencers.
Consider the segment options
It is highly unlikely that just one segmentation solution will emerge. Most often there will be a number of different options ranging from a simple firmographic approach through to behavioural, needs-based and psychographic segmentation.
In many projects, these approaches may also be blended or combined to create a hybrid segmentation solution that is relevant to the client’s needs and market.
Adopt the best fit solution
The decision on which approach to adopt should be based on an assessment of your ability to action the specific high priority segments, combined with an understanding of how the resulting segments can be used to support more targeted messaging, sales and marketing activity.
Test and refine
Market segmentation is a commitment to an underlying philosophy rather than a one-off exercise. Once initial sales and marketing strategies have been put into the market it will be necessary to review the outcomes and rebalance, or if necessary try a different option from those originally identified.
What can go wrong
One of the key practical considerations is ensuring that the resulting segments can be identified in the real world. Where segment characteristics are not immediately apparent, The Market Intelligence Co. can develop an allocation tool to help salespeople identify which segments existing customers, new customers and prospects belong to.
Another issue that needs careful consideration is the adoption of segments for which you can offer a competitive advantage. The most attractive segment to you may also be the most attractive to your competitors. This could leave everyone chasing the same potential customers. In evaluating the relative appeal of specific segments it will be important to target those for which your offering can be presented as clearly different from, and superior to, your competitors.
The Market Intelligence Co.’s approach
Additionally, The Market Intelligence Co.’s Segmenter® tool provides an interactive “slice and dice” platform for exploring and analysing research data, helping you examine results, e.g. from different segments, sectors and identify meaningful patterns and insights.
Why Choose Us?
In today’s dynamic market, targeted marketing strategies are essential. The Market Intelligence Co. has over 30 years of experience, and provides sophisticated market segmentation analysis that empowers you to target your most valuable customers.
- Advanced Segmentation Methodologies: We utilise a range of advanced techniques, including cluster analysis, factor analysis, and conjoint analysis, to identify distinct customer segments.
- Deep Customer Understanding: We delve into the motivations, needs, and preferences of your target audience, providing a comprehensive understanding of each market segment.
- Strategic Segmentation Planning: We provide research-led input into your segmentation planning, including collaborative workshops to help ensure the approach reflects your business objectives and market dynamics.
- Data-Driven Implementation: Our research provides the data-driven foundation for more targeted marketing and sales activity, product development, and strategic decision-making.
- Practical, Actionable Segmentation: : We develop segmentation solutions that are realistic, identifiable and actionable across your total market or existing customer base, so the results can be applied in real-world sales, marketing and customer activity.