Segmentation—the process of identifying specific customer groups—is imperative for personalized marketing and communications.
Often, segmentation projects entail large-scale market studies that divide a broad consumer group or business market into sub-groups based on some type of shared characteristics. Those studies then help companies determine which consumers are most likely to purchase their products.
Though frequently a long and arduous process, segmentation can make a marked business impact. Which is why it's disheartening to witness companies make repeated and easily avoidable mistakes.
Here are five such common segmentation mistakes, along with tips on how to avoid them.
Mistake 1: Relying on the Obvious
Too many companies get stuck in mainly looking at demographics, stated needs, and purchase behavior to create their consumer groups. Although that approach can be useful for marketing, it is far less effective for informing messaging and for communications targeting. Studies that rely only on such data points tend to be more tactical and don't give you the tools you need to build a customer strategy around it.
People don't make decisions solely based on their age or past behavior, so why hang your hat on data that doesn't drive decisions?
How to avoid it