Segmentation has become a contentious topic in recent years, and in some parts, a dirty word. The work of Ehrenberg-Bass has called into question the merits of narrow audience targeting, and surrounding debates (often fuelled by emotive language) have at times made it seem that you can only sit on one side of the debate. At Nature, we believe that segmentation remains as relevant as ever, and a powerful way for organisations to drive growth into the future. However, this is only the case when it is applied with an understanding of the broader context.
In an increasingly fragmented and fast-paced environment, the power of segmentation lies in its ability to drive focus and efficiency. This doesn’t necessarily need to be about audience focus, nor should that be viewed as the ‘endgame’, but rather the focus should be on brand, product and experience opportunities that come from applying a segmentation lens.
At Nature we use segmentation to address all types of business challenges, from brand positioning work, through to ideation and customer experience optimisation. By segmenting and focusing on more engaged/aligned consumers, growth opportunities can be more readily identified and pushed forward. But these opportunities won’t/ shouldn’t have niche appeal, but rather to drive growth they must carry weight across segments (or at the very least not alienate). This speaks to how we use segment ‘targeting’ in the process, narrowing focus initially before zooming out to scale the opportunity.
The success of leveraging segmentation in this way is underpinned by how well the segment framing relates to the business challenge it is designed to address. This isn’t an easy task, certainly not one that can be addressed with a blunt, off-the-shelf solution. This is where the ‘art’ of segmentation comes into play, requiring experience and skills to disentangle and make trade-offs between key characteristics. This is equally applicable to managing project stakeholders and their objectives, as it is the consumer market in question.
There is no ‘one perfect’ segmentation approach or solution. The business objectives and consumer dynamics will help inform the design, but in our experience the best outcomes come from hands-on partnership and iteration. Pure attitudinal or needs-based lenses may be best to inform foundational brand and product development decisions, whereas psychographic or behavioural lenses may be more relevant for activation purposes. But even these assumptions can be dangerous – the reality is that each situation is unique and dynamic and ultimately the segmentation should be driven by the desired outcome (not the other way around).
What we hope to highlight is that good segmentation is not easy to do, but when done well, it remains one of the most powerful resources in a marketer’s tool kit. But success starts by aligning on key outcomes (not the idea of segmentation) and navigating the multiple hurdles in the end-to-end process, without ever losing sight of the ‘north star’.
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