Photo by William Iven on Unsplash

Regardless of the size of their organization, marketers will almost always have the mandate to streamline their strategies and prioritize efficiency, meaning they must market their brands with accuracy. Segmentation is therefore one of marketers’ most important tools. Let’s look at how we as marketers can sharpen this tool with the case for data-based marketing segmentation.

Marketing Segmentation Overview

Segmentation is a critical, even foundational, component of any effective marketing strategy. Segmenting your target consumers is a divide and conquer approach that allows you to tailor your strategies and tactics to the specific characteristics of a particular group of consumers.

Put in other terms, your segmentation strategy informs how you manipulate each of the Four Ps of marketing (Price, Product, Place, Promotion) to best each segment. However, in order to make the most of your segmentation strategy, your segments must be both accurate and distinct. Accurate segments make sure you the right strategy gets to the right consumers while distinct segments keep your strategies running efficiently, ensuring there is minimal overlap.

Therein lies the case for data-based marketing segmentation. We’ve discussed the value of marketing research as well as how you can launch a research study of your own. Once you have the data from your research, we can put it to use by segmentation analysis techniques to produce actionable insights.

Intro to Cluster Analyses

Cluster Analysis Example Courtesy of Optimove

Cluster analyses are one of the better ways to turn what you know about your consumers into accurate segments that are distinct from one another. A market segmentation cluster analysis runs mathematical calculations to delineate distinct segments from an input of research data.

By inputting critical behavioral characteristics of your consumer, such as purchase frequency or loyalty, as well as descriptive characteristics, such as age or education level, cluster analyses can carve out mathematically distinct clusters. However, it’s key to understand that this kind of automated analysis can only take you so far.

Once you have the segments or clusters, you will need some artful analysis of your own to determine which of the clusters are ripe for a targeted marketing strategy. At this point, you can use your marketing instincts to begin matching tactics to each segment. For example, if you’ve identified a segment of loyal consumers with low purchasing frequency, you could introduce a sales promotion to encourage these consumers to make a move for your product while they have a chance to get a deal.

Wrapping Up

Accuracy is key. Because marketers are often looked at as the ones who spend their organization’s money, they need to make sure their strategies hit their mark. Segmentation allows marketers to ensure their strategies reach exactly who they need to reach with minimal spillover but they need to go beyond gut instinct to create these segments. Using a data-based approach like cluster analyses empowers marketers to make difficult and game-changing decisions.

Leave a Reply