Customer segmentation
Targeting customer typesRobust segmentation
Many companies struggle with developing a sales and marketing strategy which satisfies the four Ws:
Who to target?
What message, is it relevant and unique?
Where is it being broadcast? Is it in the right format?
When is it seen? Does it reach the target at the right point in their buying journey?
To avoid wasting large amounts of resource and budget, many sales and marketing functions choose to focus on “somebody” which strongly represents their target audience or segment. Some businesses manage to develop a rudimentary sense of their customer types based on observation or simple hunch. This is a risky approach and susceptible to bias and entrenchment.
Sophistication
More sophisticated brands choose to take a more scientific approach to targeting their target audiences. These are often referred to as segments or personas which are generated through an advanced statistical technique called cluster analysis or segmentation.
Quantitative survey
Behind every good segmentation is a robust quantitative survey typically delivered online or via telephone interviewing, or occasionally both. To carry weight and authority, typically at least 500 interviews are required. The segmentation process needs to start before the quantitative survey begins, to ensure we design the questionnaire in a way that is ultimately suitable for a conjoint analysis.
Types of segmentation
It useful (though not imperative) to understand the likely focus of a segmentation prior to questionnaire design. At Eureka! Research we have conducted segmentations and advised clients in this area using a number of techniques/ approaches:
Behaviour based model
Needs based model
Attitudinal based models
Classification / demographic based model
Spend or value-driven segmentation model
Not sure what's best for you?
We’d love to bounce some ideas around with you. Either get in touch with us below or have a further browse of the different research services that can be applied to your business conundrums.
Not sure what's best for you?
We’d love to bounce some ideas around with you. Either get in touch with us below or have a further browse of the different research services that can be applied to your business conundrums.
The Eureka! approach
Once the project objectives and target audiences have been agreed, we progress through these key stages.
Design
A clear understanding of your business needs drive any segmentation we undertake. As an initial output we will offer a number of segmentation options and work with you to understand which is most applicable and useful to your business. Any segmentation must be accessible, manageable and sensible to your business.
Data analyisis
Using techniques such as data reduction and factor analysis, we have to prepare the data so it is ready for the segmentation process itself. We look for any ‘collinearity’ in the dataset which basically means identifying questions that are measuring similar things; we then work out which variable will provide the most powerful explanatory insight.
Model development
This is an intense, iterative process that takes many days of number crunching to complete. The number of customer ‘clusters’ associated with the model can be controlled to some extent and we can advise you on what might be optimum for your business. We evaluate the best model fit by taking a number of statistical factors into consideration.
Options
We typically identify a small number of segmentation model options which we share with you to consider which best suit your business needs and objectives. We would present these to you and reach a joint decision over the best model to suit your business needs. This is often the stage that an engaging set of names for the segments starts to be debated!
Refinement
Time and budget permitting, it is always a good idea to consider validating the customer segments with some additional qualitative research. This is also an excellent way of bringing the personas ‘to life’ and also helping brand teams start to visualise the audience segments.
Reporting
We will develop a detailed report that will fully present the findings, additionally presented at a segment level so you can truly understand each individual segment and the optimum routes to identify and target them. Check out some of our free reports which will give you an idea of the Eureka! house style. Of course, a debrief presentation either in person or virtually is offered.
Embedding
We can work with you on a strategy for embedding the segments back into your business. This might be finding a way of applying the segmentation across your CRM database, or new acquisition/sales funnel activity. We also support clients who want to ensure that their whole business ‘buy into’ the customer segments, this might be in the form of engaging pen portraits.
Plumbase
Quantitative and qualitative research to develop detailed customer segmentations to drive targeted business engagement.
Bambino Mio
In depth quantitative research to understand current customers and to understand parental attitudes in the Change Time category in general.
Plumbase
Quantitative and qualitative research to develop detailed customer segmentations to drive targeted business engagement.
Bambino Mio
In depth quantitative research to understand current customers and to understand parental attitudes in the Change Time category in general.
Eureka! Research
6 Parkside Court | Greenhough Road
Lichfield | Staffordshire | WS13 7AU
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