Using audience segmentation research to uncover your customers’ motivations.
Your target audiences aren’t all the same – and chances are, neither are their perceptions and motivations. So why should you use a cookie-cutter approach in your marketing campaigns? Learn how creating audience segmentations based on demographic and psychographic data can help both B2B and B2C organizations identify key groups within their target audiences, uncover motivations, influence behaviors and drive customers to desired actions.
Questions & Answers
Is segmentation research qualitative or quantitative?
Actually it can be either. If you have a lot of people to survey (like a customer database of 5,000 people), you have the opportunity to conduct statistically reliable segmentation that can truly uncover organic segments within your audience that you might not be aware of – and be confident that you could do the same study a couple of years later and see the same results. If you are a B-to-B company with 30 customers generating 80% of your business, you can conduct one-on-one interviews, focus groups or surveys that will give you tremendous insight into why your customers choose you and what you can do to meet their needs. It all depends on who you are and what you’re looking for.
Do demographics play a role?
Absolutely. Sometimes a big role – obviously if you run a bank, understanding how much money your segments have makes a big difference. But typically demographics are only part of the story, and you need to avoid assumptions that people always make purchase choice based on income, age, or where they live.
Can you segment by what stage people are in as part of a purchase decision?
If your product relies heavily on people being at a certain stage in a big purchase – buying a house, for instance, then obviously where they are in the process is important. If you provide help checking and correcting any errors on their credit report, you have to get them before they go try to get a mortgage. But if you do your segmentation research right, that information will show up when you ask questions about why they need your product.
How do you write survey questions so segments form naturally?
Basically, don’t ask leading questions. You don’t want to say, “do you like that our candles have an intense fragrance?” Instead try to ask a question like, “how important is fragrance level?” and then ask, “do you prefer a strong or a subtle scent level?” It’s also really important to find out not just how strongly an element associated with your brand, but how important that element is in making a purchase decision. You may be widely recognized as being family owned and operated by all your segments, but that may be very compelling to some segments and completely irrelevant to others.
When you are appealing to your different segments online, do you have separate sites or just different areas on the same site?
It depends, but typically you can accommodate message for all your segments on the same site if you set it up right. The important thing is to make the information people want, easy to find on your site. And your home page should definitely be front and center about the needs your audiences have – for our BestBlooms example, “Gifts under $25” or “Decorating with flowers” should be prominent links. I would also recommend developing specific areas of the site for specific needs, and possibly using unique URLs in your marketing activities that link to landing pages specifically designed to carry the appropriate message for the person responding. The more relevant you can be, the better.
How long does it take to conduct segmentation research?
It depends on what type of research you need to do, but even extensive statistically studies can be fielded online and yield information within a couple of months.
What if you have two segments that are really similar?
Segments really should be differentiated in at least one of a couple of ways:
1) their motivations are different, or 2) their motivations are similar but how they want to be reached or how they want to buy is really different. If you have two segments that really agree on those things then chance are whatever you’re using to separate them (gender, age, geography) is not particularly relevant.
Should you offer an incentive to people for taking the survey?
Typically. It doesn’t have to be big, but it should be relevant – and if you do it right it can serve your purposes as well. If you sell flowers and are surveying existing customers and prospects, a free order or coupon can be very compelling and also drive trial for a new item you have. Be careful, though – especially in B-to-B situations your customers may be unable or unwilling to accept an incentive.
How much does segmentation research cost?
If you’re conducting a full qualitative study using online surveys with invitations handed out in your retail locations or mailed and then utilizing factor and cluster analysis on the back end, the research alone can run you $50,000 or more not including incentives, postage fees, etc. If you’re doing one-on-one interviews with 30 customers obviously the cost is a lot lower. Again, it depends on your situation.
With more than 20 years’ experience in marketing, product and brand management and strategic planning, Susan is adept at managing marketing strategies for clients ranging from local businesses to Fortune 500 companies. She has performed consumer segmentation research for such clients as Macayo’s Mexican Kitchen, a Phoenix-based restaurant chain, and Esscentual Brands, a national retailer of bath and home fragrance products, in addition to working with focus groups, surveys and other research tools. Susan graduated cum laude with a bachelor’s degree from Trinity College and earned her MBA in Entrepreneurship & Marketing from the University of Arizona.
