Follow us

Insider’s Corner with Peter Rosenwald: Expanding Our Approach to Segmentation

With the explosion of digital media, the old rules of segmentation are in desperate need of an update.

In this issue of Insider’s Corner, Peter takes a look at how segmentation is evolving and how you can make sure that no potential customer is left behind.

To learn how to assess and increase your brand’s value, read Peter’s previous post here.

Defining the Ideal Audience Segment

In today’s extremely fine-tuned, data-driven, digital environment, it’s important to define the ideal audience segment as any single individual who has shown an inclination or desire to acquire the marketer’s product or service and is ready – or almost ready – to buy.

The incredible expansion of digital media has challenged our traditional methods of segmenting audiences. Once upon a time, in the pre-history of modern marketing, our approach to segmenting prospects into identifiable cohorts was embarrassingly basic.

Marketers would generally differentiate gender by subject matter of the print or broadcast media content. In those Mad Men days, men liked sports and cars, and women liked fashion and homemaking. Geography segmentation was also widely employed since most media served narrow geographic areas.

We all know how dramatically that has all changed and the critical importance of rich data. While there are still some fairly straightforward segments (e.g. women in their last trimester of pregnancy are almost certainly prospects for diapers, and the owners of new automobiles must have insurance regardless of gender, income or geographic location), with the expanded reach of digital, you may find that you have target audiences you would have never imagined.

Reverse Segmentation

According to No Consumer Left Behind, a new report from Lance Porigow, Chief Marketing Officer for The Shipyard, the idea of “reverse segmentation” refers to initially casting a much broader net to help you identify prospects you may have missed before.1 This approach suggests that it’s only after you have tried to reach all consumers that you should analyze the resulting data to see how you should proceed with segmentation.

Once we’ve identified our potential customers, the more of these individuals we can segment out of the total data pool of prospects, the more efficient our marketing efforts are likely to be. All the sophisticated analytical modeling in the world is unlikely to get you very far without proper segmentation.

Tried and True

In an effort to understand the challenges of segmentation, try considering these four common segmentation types:

New Insider’s Corner—Expand Your Approach to Segmentation

Learn how to best segment your target audience.

  • Geographic: It’s still one of the easiest and frequently the most practical. If there are geographic limitations, these obviously come first.
  • Demographic: Within any geographic limitations, you will certainly wish to focus on those people who can afford the product or service. But as we all know, “affordability” is not just a product of how much money you have in the bank but is frequently strongly influenced by socio-economic factors such as age, education, employment status, gender and other demographic criteria.
  • Psychographic: A healthy young person in the right geographic and demographic spheres who loves the outdoors may be a prime prospect for bicycles but not have the slightest interest in windsurfing longboards – or the other way around. The more we know about an individual’s passions, the better able we are to decide whether to market to them and what might be the most appealing creative approach.
  • Behavioral: Most importantly, how the prospect has behaved in the past can be an indication of how they will behave in the future. Your most likely customer is the person who bought from you yesterday. This is one of the key reasons more and more marketers are enticing consumers into “clubs” and other frequent buyer programs. A detailed view of your current customers is critical. They are likely to display many similar behavioral characteristics. Mining that data is the gold of segmentation.

The Art of It All

While this tried and true methodology has its merits, the weighting of the relative values of each of these four segmentation types is more of an art than a science. If you practice reverse segmentation, you may find that your key segments are different than what you initially assumed them to be.

When planning marketing actions, taking advantage of all the data available to you from the outset will increase your ability to segment your market into meaningful cohorts. Once you’re able to determine the key characteristics of each of these cohorts, deal with them as personally as possible. This expanded approach to segmentation is certain to show up well on your bottom line.


Leave a Reply

We provide audience-first data & marketing solutions to all industries.