Marketers have been segmenting their customers for years but the majority of those marketers limit their segmentations to demographics, frequency of purchase or size of basket. While there’s still value to differentiating your customers and marketing to them based on those segmentations, most marketers are missing out on the opportunity to derive the maximum value possible from this tool.
If you’re new to segmentation or think that you’ve derived all of the value that you can from your current segmentation practices, there are four main things you need to know:
Our client, a non-profit, natural food cooperative, has been serving their members and the community for 40 years with a mission to provide natural products to a community that didn’t have easy access to them due to their geographic location. As a non-profit organization, the Co-op’s profits go back into the organization to help sustain their community outreach efforts, including classes on natural, organic food, as well as environmental awareness and sustainability programs.
Our client, a century-old member-funded outdoor recreation club, was experiencing a multi-year decline in membership. They were anxious to identify the cause of this decline, which was impacting their bottom line. In 2011, they undertook a survey of current, past, and non-members to better understand what compels and prevents people from joining or renewing their memberships.
Many marketing, market research, analytics, and consulting firms offer to segment customers. On the surface, segmentation sounds great. Bucket customers into unique groups. Make the people in each group as similar as possible. Ideally, each segment has the same needs and is of the same value. Clients are told that than you need only craft a strategy for each segment to become an even more successful business.