From wallflower to social butterfly

Editor's note: Joe Beier is EVP of consumer insights at research firm GfK. Luis Molina is senior research director of consumer insights at GfK. 

In this age of hyper-personalization, it sometimes seems as though we have all become segments of one. Certainly, brands are striving to make us feel deeply special and understood with every interaction – but on a grand scale, true personalization is a massive challenge.

You could call segmentations the original targeting and personalization tool; they categorize people in more effective, actionable ways than just age, sex and income. Segmentations define your own brand’s perspective on consumers – the ones who already love you, those who will never be convinced and the many whom you might be able to win over with smart, relevant targeting. 

Segments help you approach thousands or even millions of consumers in a more personalized way, so their value in taking personalization to the next level is undeniable. But too often, segmentations fail to fulfill their potential; the problem is usually not poor methods or faulty assumptions (though these may also come into play) but something much more fundamental: a lack of engagement with the very people and processes that should be bringing the tool to life.

Instead of building strong relationships and circulating in the larger corporate world, too many segmentations grow lonely – isolated, detached and largely ignored. Though many thousands of dollars may have been invested in their creation, these projects languish on shelves and lead to few, if any, changes in marketing or product strategy.

It seems as if avoiding this sad state of affairs would be relatively easy and in the interest of everyone involved. But “socializing” a segmentation is more complicated than we might expect. We have to consider the character of the company, the role consumer insights play in the larger marketing organization and even the personalities of the segmentation’s developers.

Some people in the organization may be so personally invested in the study that they cannot recognize its lack of engagement and failure to connect. As always, the first step toward solving a problem is recognizing it – and there are specific symptoms and warning signs that we can watch for when assessing a segmentation’s relevance and real-world viability.

Use of black-box methodologies. Assuming that “Trust me” will be a sufficient rationale for an otherwise mysterious segmentation approach is usually a recipe for skepticism. Such approaches are usually devoid of the real-life and/or business contexts that are critical for developing truly actionable segments.

Lack of connection to other inputs and goals. Disconnection can undermine a segmentation’s value at two key levels. First, failing to align with other data sets gives the solution a monolithic perspective. In addition, developing a tool that has little or no connection to the company’s larger business goals leads to a segmentation that will always be removed from real relevance.

Inconsistent functional buy-in from stakeholders. A lack of sustained stakeholder acceptance can be crippling to the effectiveness of any study, no matter how well-conceived or -executed. If the marketing team is driving product innovation from a segmentation but the digital team is focusing on a completely different architecture and goal set, there is little chance for a happy ending.

Ambiguous activation direction. It can be easy to lose sight of the fact that lofty strategic studies must, in the end, provide direction for highly tactical in-market executions. If the methodology is not collecting data at a sufficiently granular level, the ability to activate on a segmentation can be severely curtailed.

Overreliance on lengthy survey instruments. When you ask a respondent to remain engaged, alert and candid for 45 minutes straight – at a time when attention spans are shrinking – there are bound to be shortcomings in the data. This is especially true when many surveys are taken on mobile devices in sub-optimal conditions.

Makes its mark

So, what can you do to increase the chances that your next segmentation – or even one you just completed – makes its intended mark on corporate strategy and tactics? Based on years of working with segmentation tools and learning how they do (or do not) make their way into brand planning, we have compiled our top six recommendations for researchers and marketers alike. 

1. Remember – it’s just business.

In your early discussions, focus on the business issues to be solved not the solution itself. This will allow your team to “begin with the end in mind” and define the right priorities for the project. Extensive stakeholder interviews at the front end will be crucial to this process, exploring: what “job” the segmentation will need to do in different functional areas; which prior work should inform the new solution; the “going-in” hypotheses that people have about market segments (useful to guide the back-end analysis); and how the segmentation could and should be activated.

2. Sweat the process.

Many of the most important steps toward a highly valued segmentation come not in planning or activation but in the way we handle process – the nuts and bolts of the project. An essential element, for example, is setting up a thorough schedule for collaboration at every stage. While segmentation is heavily dependent on science, you also need to incorporate the art of working together, from discussions about how to define the segments to development of a typing tool.

Researchers also need to work hard to make surveys as user-friendly as possible – another key aspect of process. Keep your questionnaire laser-focused on the goals of identifying and sizing segments; this will result in richer, more highly defined segments that will ultimately be more actionable for your organization.

Another way to keep questionnaires under control is connecting to other data sets, which can minimize the need for lengthy questionnaires capturing a litany of very basic information. Designing for mobile and using modular questionnaire approaches are also proven tactics for making surveys less onerous for respondents.

From choosing the right statistical solution to defining both “growth” and “maintain” targets, getting the process right is key to a healthy balance of art and science.

3. Consider both head and heart. 

In his book “Thinking, Fast and Slow,” economist Daniel Kahneman identified two systems for decision making – one quicker and more emotional (System 1) and the other slower and highly rational. Consumers employ both systems, depending on the situation and the decision at hand – and the ideal segmentation should also incorporate elements of both.

To capture the heart as well as the head, employ different research techniques. We can evoke visceral reactions – such as impulse purchase triggers – with emotion-driven words and phrases rooted in product experiences. Pictures are also a great way to capture System 1 data; in a study on sports nutrition products, for example, we used images to represent body types and these became important elements for understanding the segments.

4. Can’t lose when you fuse.

Custom segmentations are usually based on what we might call a single and independent data stream – typically a custom survey. Data fusion is essentially connecting the emergent segments to other “external” databases, extending the utility or value of the original segmentation by linking it to other worlds of information. 

When you fuse a segmentation to credit card purchase or customer loyalty information (to name just two sources), you can:

• Give a fuller picture of the segments, which builds credibility and engagement.
• Make the solution more actionable by tying it to specific activities, like marketing campaigns.
• Bring different levels of understanding to the segments, from where they live to how they feel about different aspects of life.

By expanding the reach of a segmentation, we can help to assure that a solution avoids isolation.

5. Future-proof the solution.

With so much money at stake, we cannot afford to produce segmentations that have already expired upon arrival. To earn trust and buy-in, segmentations must take in what is known from the past and then look forward to what will (very likely) be. One way to approach this seemingly impossible task is to align with consumers who represent the future of a brand’s offerings. 

Our firm, GfK, has made use of a population segment known as Leading Edge Consumers (LECs) – people who are: early adopters of a specific product set; passionate about the category and even the brand itself; and influential when it comes to recommending products or services to a broad circle of friends and family.

The needs and behaviors that LECs exhibit anticipate those of the vast majority of consumers, who will likely pick up on the same trends in the months or years to come. Over the course of over 40 years, GfK has validated the use of LECs as a forward-looking way to prioritize segments in a variety of industries and categories.

A second future-proofing technique is to assign a future value to each segment, taking many factors into account. In addition to defining a segment’s current value (size, spending levels and frequency of category purchases), we determine future value through another mingling of art and science, exploring questions such as: 

• How much the segment is likely to spend in the future.
• Whether they are discussing category and brand experiences with others.
• Whether they are adopting new category products early.
• How old they are – younger consumers hold greater potential value because they have more buying years ahead of them. 
• If they are from growth groups (e.g., Hispanics, Millennials).
• If they have children – parents usually transmit their category and brand behaviors to their children.

Showing that a segmentation speaks to the future as well as the present assures stakeholders that they can confidently activate on the solution without needing to change course just a few months later. 

6. Activate like you mean it.

Activation is not just a “nice to do” at the end of an insights project. It is the No. 1 factor that defines a project’s legacy and “value added” within the organization. GfK, for example, employs a suite of methods to connect segmentations to the larger company and the marketplace – techniques that include: activation workshops, customer-ready presentations, data portals, videos, data visualizations and shopping journey maps.

It is important to note that activation workshops are very different from standard “sharebacks,” engaging a more cross-functional audience and providing the kinds of interactions and fact-based strategies that make a tool memorable and easy to apply. 

Engaging segment profiles are also important to socializing your segmentation inside and outside the company. If your segments remain locked in heady spreadsheets and PowerPoints, their chances of moving the needle for a brand are remote, indeed.

Firmly siloed

With all of these methods at our disposal, it seems unlikely that a segmentation would ever be lonely again. But old habits die hard and many organizations remain firmly siloed – within marketing itself and also across the broader company. Socializing a segmentation may feel counterintuitive in some ways, forcing you to push against the tide of separation and territorial behavior. But remember the game plan and consider the consequences of going with the corporate flow. Any solution that demands so much thought and effort should be seen and used by all of the people it was meant to guide. Take on the broader world knowing that your tool is built for activation and needed to help the company grow.