Segmentation in action
By The Team 16 Jul 2010.
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All organisations, be they Unilever, a bank, B2B or public services, use some form of targeting to design and deliver brands, products or services to their customers. And the tighter the resources the more critical that this is done properly, with a minimum of inaccuracy and guesswork.
The traditional way to group people is demographics (“men 25-34”) or lifestage (families, empty-nesters etc). But this simply groups a disparate bunch of people in a convenient but rarely useful way as it treats people, say ‘men 25-34’ as single homogenous group whether you’re selling shampoo, credit cards, rock music or transport services. Properly-done, clearly-executed, quantitative segmentation is the only way to group people in a way that is actionable. Just take this case in point from the private sector.
A successful subscription-based media business used universal messaging but the post-family lifestages i.e. empty nesters and older were proving resistant. As a result they were failing to meet demanding acquisition targets despite tremendous success among families and younger age groups. Media plans upweighted to reach the >50s made some headway but cost per acquisition was ridiculously high. Even developing campaigns and offers specifically targeted at empty-nesters and retirees seemed to do more harm than good by treating these lifestages as the same. The result was that the company offended more people than convinced them. These people simply refused to be defined by their stage in life. The company commissioned a segmentation of empty nesters and retired adults.This defined five segments, of whom the biggest had huge potential: low awareness but high loyalty – and low maintenance once subscribed. As a result, the company made three changes:
- Changed who they were targeting to focus on this segment.
- Changed what they said to them and how they said it, based on the attitudes and barriers to subscription.
- Changed where they placed bespoke messaging by developing a media and PR plan based on this segments’ lifestyle and media habits.
