Cultural segments

With businesses looking to mine their transactional databases and other sources of real-time behavioural data for richer insights into their customers, it’s increasingly apparent that the traditional segmentation model must evolve and adapt to stay relevant.

While many of the industry experts gathered reported that they had explored the possibilities of segmenting based entirely on behavioural data – with varying degrees of success – most agreed that the ideal segmentation of the future would be a hybrid of traditional and modern methods.

Added Value’s Paul McGowan says that his clients are both “intrigued and apprehensive” about the use of big data approaches to segmentation; excited by the possibilities but wary of “deficiencies in developing diagnostics around why people do what they do”. For McGowan, behavioural information is only “one part of the story” and the ability to take new sources of data which explain behaviour and interrogate them to identify reasons and rationale is going to become an essential skill for any research practitioner.

Mark Uttley, of music streaming service Spotify, has perhaps more reason than most to be intrigued by the possibilities offered by the new data-rich world. Having pioneered a successful segmentation at Sony Music based on survey data, back in the mid-2000s, he now finds himself surrounded by an ever-expanding wealth of behavioural data that opens up a huge range of new opportunities for understanding consumer behaviour.

Even for data-driven Spotify, more traditional survey-based segmentation is still viewed as having a role in making sense of the numbers, but that role is changing. Big data offers the possibility of solving a problem which has always been faced by those creating segmentations – immediate obsolescence of the collected data.

“Where it’s going now is that segmentations have to be real-time – you have to be able to see the immediate results of the actions that you’ve taken. That kind of real-time view is the Holy Grail… and something we weren’t able to do while I was at Sony Music.” Uttley explains.

Mark Mulligan, music industry analyst, concurs: “In technology, the rate of adoption is accelerating; people are being exposed to more and therefore changing behaviour more quickly than ever. Think about the growth of Facebook, particularly on mobile, as an example – that has raised the digital IQ of everyone in the space of a few years.  The rate of change means segmentation has to be more flexible.”

Cultural anthropologist Dr. John Curran goes even further, suggesting that it’s not just how people change over weeks and months that needs to be looked at, but how people perform different roles even within the course of a day.

“Segments should be positioned less as ‘given facts’ within a business and more as ‘ideal types’,” he says. “They have certain cultural codes. Segments are cultural, and how they’re defined and designed is also cultural. If a segmentation model is too rigid, it leaves little room for fluidity but also for creativity. We also need to look at how people move between segments – because that’s what humans do. I’m very different now, to when I’m on the stands at Crystal Palace football club. It’s about being able to track those emotional and cultural touch points.”

Darren Whiting, of Sony PlayStation, posits that segmentations need to be multi-dimensional and adapt to task at hand: “If you think of the funnel, segmentations work great in terms of high-level planning, but when you get down to one-to-one, they start to crumble, but that’s where behavioural data comes in – it’s a lot more reliable and realistic.”

In his own organisation, hooking up segmentation with big data is already having real impact in the business in a way that traditional survey-based segmentation never could. “As a networked gaming platform we’re quite data-rich, so we’re starting to understand not just what people say, but what they do,” says Whiting. “We’re starting to assign people to segments predictively when they sign up to the platform. For us, segmentation is no longer this abstract planning tool that falls apart when you try to use it in other parts of the business.”

For Uttley, there needs to be a shift in the mindset of research suppliers offering segmentation in 2015 toward the synthesis of multiple data sources and by exploring the possibilities of the combination of traditional and modern methods. “The suppliers that win in the future will be the ones that join up data sets, and start driving segmentation from behavioural information,” he says.

Embedding segmentation

While the methodological framework of segmentation may be facing new and exciting challenges, the evergreen issue of engagement is still taking up a lot of thinking time. All agreed that while it was vital to extract the maximum information from the right data sources, in the words of independent consultant Chris Carey, “If your stakeholders don’t use it, it’s all useless anyway.”

For McGowan, creating a segmentation is only the beginning of the journey. “The segmentation solution itself is, at best, 40% of the value. Some businesses stop with that: you create a debrief, share it with the marketing team, they look bored, and you move on. The job of embedding the segmentation and ensuring that it drives business decisions – that is the difference between a segmentation that becomes part of the bloodstream of the business and one that doesn’t.”

Uttley offers some tips for successfully embedding segmentations in an organisation, arguing that the most successful programmes involve a degree of “insight letting go of insight” and devolving responsibility to those who are best-placed to ensure its effective use in business.  “Attach segmentation to the forward-thinking people within an organisation. Use it on specific projects based on the ones having the highest potential for success. Write those up and showcase them to the rest of the business – show them the results, the creativity and the awesomeness that came out of these projects. When you’re not forcing it down people’s throats, but using an incremental, results-focused approach, then gradually it becomes part of the culture. It hits a brick wall if you try to mandate it.”

Andy Crysell of Crowd DNA, whose ‘UK Tribes’ project for Channel 4 for many exemplifies the successful embedding of segmentation within an organisation, says that engaging stakeholders is increasingly critical in terms of effectiveness.

“The challenge for us is not just providing pretty content that’s purely journalistic, but making it interactive. How do we allow the stakeholders to create the content themselves and give them a sense of ownership? There can be really quick fixes – such as asking your team to take a different route to work every day to encounter different segments. Storytelling is really important –getting the teams telling the stories themselves is where it really takes off,” says Crysell.

Whiting argues that the work up front is just as important, suggesting that too many segmentations can feel like ‘research projects’ rather than ‘business projects’; “when the research team thinks it’s got something great, keeps trying to shove it down everyone’s throats, but it’s not actually engineered into the business process. Getting that right is about, ahead of time, designing it to fit in with those business processes,” he says.

Colin Strong of Verve suggests that many segmentations fail at this stage because they try to be too wide-ranging, and don’t focus on providing solutions where they are actually required. “It’s very easy to think that a segmentation is uncovering an impartial, objective view of the world, but it ain’t! It is one view and there needs to be more recognition of that. Having an open discussion with stakeholders about what it’s hoping to achieve is important, otherwise you end up with something that’s trying to be everything to every part of the organisation, and that doesn’t really work.”

Common themes

Big data and cultural engagement were the hot topics of discussion, and it’s not difficult to make connections between the two. The common thread is the need to make segmentation live and breathe, and not sit as a static document on a shelf or hard drive.

Embracing the analysis of behavioural ‘big data’ opens up the possibility of a shifting segmentation that is never finished and always evolving, which truly reflects the fluidity of human nature and personality.

Yet without the guiding hand of the expert who can not only interpret this new kind of segmentation but bring it to life on an ongoing basis for key stakeholders, ultimately it all amounts to nothing.

Attendees

(Doug Dunn, chair)
Chris Carey, founder, Media Insight Consulting
Patrick Collins, research manager, BBC Radio 1, 1Xtra, Radio & Music Multiplatform
Andy Crysell, founder/MD, Crowd DNA
Dr. John Curran, CEO/founder, JCIS
Paul McGowan, CMO, Added Value Group
Mark Mulligan, co-founder & analyst, Midia Consulting
Shawn Paltiel, senior insight manager, Sony Music International
Colin Strong, managing director of Verve Ventures
Mark Uttley, global head of marketing insights & analytics, Spotify
Martin Vovk, senior insight manager, Sony Music UK
Darren Whiting, director digital marketing & CRM, Sony Computer Entertainment Europe