marketing and sales executives from Silicon Valley

Monday, April 2, 2012

Segmentation for Fishermen

In the debate about product-market fit, the phrase "boiling the ocean" is used to negatively describe a target market that is too big to effectively service. Can a product be good enough for everyone? Not really - as the one size fits all mentality ignores many of the obvious and subtle differences between individuals that can make or break a buying decision. On the other hand, the product and marketer needs to balance the needs of the individual sale with other considerations, such as volume, cost to produce/deliver, product maintenance, and support. In my earlier segmentation post, I discussed how log analysis and excel spreadsheet cranking let to understanding a segment.

In the big picture, you won't always have excel jockeys or tools that quickly reveal market segments. That when you take a deep breath and acknowledge that segmentation can and does take many forms, leading to misunderstanding, misuse of the terminology, and poor delivery on expectations.

When creating products or marketing campaigns, there are many layers of customer identification. Here are a few:

  • Demographics (age, gender, location)
  • Psychographics (personal interests, activities, and opinions)
  • Behavior (specific site actions, loyalty engagement, frequency and usage rate)

The cost of segmentation mechanisms increase with the dept of the data-set, but the resulting targeting should also yield the best results. Imagine the difference marketing to a Female of 35 years, with 2 kids in elementary school, vs marketing to a Female of 35 years, with 2 kids in elementary school who uses coupons, watches Ellen, and likes reading books? How would that change product or the marketing campaign? Would that change if you know she spent 2 hours a week on coupon sites, read mommy blogger reviews, and signed up for 3 product safety for kids email lists?

Don't get too carried away. Having more data could lead to analysis paralysis. The smart marketer knows that he/she needs to wade through a haystack of profiling info and extract the key actionable nuggets that allow him/her to make an impact. If profile data suggests that the physical or online places that the target 'hangs out' are within your ability to reach them, then 'go fishing' there. This common sense advice is a basic extension of using the old BPA statements for magazine advertising applied to online advertising or other physical events. Find the venues and vehicles where your target segment is involved or engaged, and communicate to them there.

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