Why You Need To Segment Your Customers

A worthy re-post. I originally posted this in July 2010, if you missed it, now's your chance!

Often businesses and organizations skip a critical step in formation of their marketing strategy - target audience segmentation, or essentially defining who, along the spectrum of potential customers, to attempt to serve.  Segmentation shapes every piece of the marketing strategy since the customer, not the product or service, determine the game plan and rules by which the game is played.

So why do smart people (like you perhaps) skip it?  Common response:

In reality, many people just don't understand the power of segmentation or how to do it well. 

As I mentioned, segmentation drives key decisions related to your marketing strategy.  To do it well does take time, but it is absolutely, one-hundred percent worth it.   And even if your product is designed for the mass market, you still need segmentation to define who the most likely early adopters are and how to engage them.

For example, a chocolate brand segmenting the market based on use habits may choose to target those who primarily use chocolate for cooking & baking, while another might target those using it for daily snacking.  The choice has important implications for what kind of chocolates to make & in what shapes, how to package & price their chocolates, and where to sell it. 

Segmentation involves deciding on what basis to divide the variety of consumers that might benefit from your product or service.

Thought-starters:  How does your organization segment the market?  How should they segment it?  Are you using the right marketing tools to reach the segment you've chosen?

Need help answering these questions?  Email me.

Using Insights to Inspire & Innovate

Entrepreneurs, start-ups and innovation labs at big companies in the modern world face a similar challenge - how to inspire their people to innovate in a way that will result in big ideas that actually make it out of the lab and into the marketplace.

Many of these talented individuals miss a critical step in their innovation process:  gathering the right consumer insights to inform their innovation & brainstorming process.

The right insights are NOT:  demographics, what consumers say they want.

Those kinds of insights don't help inform innovation, in fact they can stifle or mislead it.

The right insights come from: understanding your target consumer unmet needs, observing the habits of the extreme users of your existing products,  understanding your customer's perspective by putting yourself in their shoes as they shop for and use your product.

This last one is really important - what is it like to be a mom toting three kids to the grocery store to shop for your product?  What is it like when she gets home and tries to open your product, figure out how to start using your product?  What could make her experience more rewarding for her?

It's easy to forget that how you see the world is likely very different from the consumer you are trying to win over.

Once you understand their perspective - by literally putting yourself in their situation - you can put your product development hat back on and create a new product that will not only make it out of the lab successfully, but will win over customers again and again with your product alone, not a marketing gimmick or message.

Are you gathering the right insights to inspire you and your team?