Segmentation is a people problem, not a maths puzzle

Strategy is choice. So says Roger Martin, co-author of Playing to Win: How Strategy Really Works – a book that has deeply influenced how we approach our work at Incite.

Ultimately, segmentation is a tool for making choices. Put simply, segmenting a market gives you things to choose between. The success or failure of a segmentation should be thought of in terms of its ability to help organisations make decisions – ideally the right ones.

We see three critical stages where the process of making strategic choices through segmentation can fail – and in all three cases the biggest risk is not statistical mistakes or dodgy data.

Far more commonly, segmentations fall down because teams have failed to engage three deeply human capacities: curiosity, creativity and habit.

Begin with curiosity
Segmentations can be big, expensive and complex. That means there is a natural eagerness early in the project to be seen to be making speedy progress. But agency and client-side researchers alike need to make time to engage their curiosity first.

This of course means building a thorough commercial understanding of the brief: what avenues of growth are open to the brand and so what types of segmentation might be most powerful?

But equally important is being curious about the stakeholders who will eventually use the segmentation – understanding their perspectives, what motivates them, and what they are passionate about. Focusing on the views of the people within the business at this stage builds trust, engagement and ownership that will be vital to making the project a success.

One valid technique is to create empathy maps – similar to those used to understand consumers in qualitative research – to capture the influences and perspectives of stakeholders. These serve as guiding documents for the rest of the project.

Develop solutions with creativity
There are innumerable ways to segment any market. A rote solution is rarely the best one. Instead, creatively seeking and applying inspiration from outside the world of research can lead to non-obvious solutions that illustrate different types of opportunity and are inherently more memorable and engaging.

Three sources of inspiration we have found helpful when considering ways to segment the world are:

• Academic psychology – for example, the idea of regulatory focus theory, a framework that characterises people in terms of their attitude towards a particular goal: are they looking to maximise benefits or minimise risks? This can be a powerful way in to understand the thinking that guides consumers
• Pop culture – from the students in 1980s film The Breakfast Club to the characters in video games, much of pop culture explores stereotypes and subcultures that can be a powerful way to think about consumers 

• Classical archetypes – it can be particularly helpful when segmenting brands and defining their role to look at the archetypes they adhere to and the roles they play in consumers’ lives, from the world-changing Hero to the quietly helpful Butler.

Activate by harnessing habit
Even when a segmentation is actionable in principle, it can fail to lead to the right choices if it is not adopted, embedded and activated over the longer term.

Again, at heart, this is a challenge about people. It is about finding ways to embed the framework into the day-to-day work of the right people in the organisation by providing collateral and facilitation that replace old habits with new ones.

Building long-term habits of usage is the day job of marketing and borrowing techniques from the marketeer’s toolkit can be a particularly helpful way to do this.

This can mean creating a distinct visual identity for a segmentation, or developing a plan that exposes stakeholders to multiple touchpoints with the framework over time. Any nudge or cue that places the segmentation in front of people at the right moment will help. And it can mean thinking about the emotional response any given touchpoint is intended to create.

Lisa Stych is director in the research practice at strategic consultancy Incite.