Use caseSegment your customers
Build segments in three passes, interviews to find what separates customers, a survey to measure it, then interviews again to draw each group, and keep the defining questions so the scheme can be refreshed later.
The variables a segmentation is built on decide whether anyone uses it, so they come from customers first and from the survey second.
Open interviews with a wide spread of customers surface what separates them, such as whether they buy for status or for reliability, which gives the survey its variables and the wording to ask about them.
A Pulse survey then measures each need and behavior the interviews surfaced, across a sample big enough for the analysts to run cluster or latent class analysis and compare several candidate solutions.
Once a solution is chosen, the handful of questions that best predicts membership is written down with its scoring, so next year's refresh, or the classification of a new customer, uses exactly the same yardstick.
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GrowwClusters on a slide seldom change a plan, so the final pass gives each group a story, a place in the order of priority and a name.
Pulse groups follow-up interviews with members of each segment into themes of their own, with quotes showing how that group shops, decides and talks, so a segment arrives as people instead of a column of averages.
With needs, size and value set out for each group, leadership decides which segments to pursue, which to serve as they are and which to leave to rivals, and what each target needs from product and message.
Each segment gets a short name drawn from how its members describe themselves, so a planning document, a creative brief and a sales call all refer to the same customers in the same way.
Understand how people use a category, what they think about it and what shapes their choices.
The usage and attitudes template
Run this studyThe purpose comes first in segmentation research, since a scheme for messaging rests on attitudes and needs, while one for sales coverage may rest on firm size and buying behavior. Qualitative interviews generate hypotheses about what separates customers, and the words to measure it with. A survey of a representative sample then measures needs, attitudes, behaviors and outcomes, and statistical methods such as cluster analysis or latent class analysis find groups. Several solutions are compared, and the one chosen is distinct, stable, sizable, reachable and useful, which can differ from the best statistical fit. Segments are then profiled, named and brought to life with qualitative follow-up, so they can be put to work in marketing, product and sales. Refreshing sizes and profiles every year or two keeps them current without the disruption of a full rebuild.
A niche segment worth targeting may be a small share of customers. Because interviews run at scale, its portrait in the final pass is drawn from as many conversations as the largest group's, and leadership can choose it with the same confidence.
When leadership chooses which segments to pursue, a short recording from each plays beside its portrait. Hearing a price-driven buyer and a loyal specialist describe their week makes the choice one about people.
Another business unit wanting its own segmentation can start from this study's brief, where the question, areas, interviewees and qualifying rules are written down. Its scheme then rests on the same logic, and the two can be read together.