Segmentation is one of the many ways to do this, well, that is if you have already established that you have the resources and time to do it.

Key to a successful segmentation is the choice of the segmentation variable/s.

Firstly, the variable/s that you pick to segment your market MUST MUST MUST be important to your business goal. And this fact must already be well established either based on prior research or based on industry-specific experience before plonking down a hefty sum for a segmentation to be done.

An example of a less able variable might be psychographics. While I wouldn’t say that psychographics are irrelevant, I would question: Will addressing your communication to meet certain personality traits/attitudes to life likely to lead to increased sales? Are the psychographics able to help you predict your consumers’ purchase intent? For some categories the answer will be yes, for some it might not be the case.

Some may also argue that inherent attitudes might lead to certain behaviours in the category and hence hopefully, lead to purchase of your brand. In that case I might be keen to suggest – let’s then go with behavioural segmentation and profile each segment’s prevailing attitudes. Alternatively it is also possible to do a segmentation based on a combination of both behavioural AND psychographics.

Secondly, the variable/s must not only have an impact on your business goals, it must be variable/s that will create differentiating, discriminating segments. Otherwise you might end up with a couple of segments which have generally similar attitudes and behaviours towards your category, with only minor variations that may not be worthwhile to customise your products for.

Thirdly, it must be understood that even if the segmentation exercise reveals that the market do have sensible segments that are discriminating, it doesnt mean that ALL of the consumers within each segment are homogeneous – they are just individuals who have a higher probability of falling into a certain segment over another segment, and there will ALWAYS be anomalies. Hence there are many, many ways of segmenting a market and deciding on which way will depend on the goal of the segmentation. Marketeers need to understand this point as it is important to realise that segmentation is always about DESIGN, where segments are simply tools to aid decisions, not dictate them.

Lastly, because the design of the segmentation is so important to its success, it is important to give your agency or stats team sufficient time, space and support. This is because in order to reach a good decision on which variables to include in the segmentation, the stats team will need to consider a mix of several analytical techniques – conjoint, maxdiff, factoring, clustering etc. From there, the stats team will then be able to decide what are the best ones to use based on how the data turns out – hence do give them space, time and support to explore this thoroughly for you.