Having a good understanding of customer needs, how to reach them, and the different messaging required for each segment means the difference between success and failure in this increasingly attention devoid world.

Tailoring messages according to segments that matter can make a difference in both efficiency and effectiveness of marketing efforts. In fact, communicating with some segments in one way could be less than ‘useless’ while a different message outlined in a personally relevant way could prove to be far more effective.

Other reasons strategic segmentation makes sense to instinct and reason:

  • understand customers and encourage changed behaviour through new product purchase
  • identify specific segments whose needs represent risk and address them
  • validate behaviours
  • identify opportunities to grow the business.
  1. Ensure the segmentation is embedded in every aspect of the operation by establishing a whole-of team responsible for managing the segmentation strategy (IT, R&D, operations, sales and marketing, corporate communications, and finance).
  2. A qualitative phase to explore attitudes and behaviours (this could be done with face-to-face focus groups, online forums or a mix of both). This phase is crucial to ensure the segmentation bases/variables are clearly defined and in simple language.
  3. A substantial survey should enable the segmentation solutions to be robust.
  4. The survey should contain a discrete choice model element to allow a range of solutions to be tested.
  5. The segmentation analysis should identify the segments based on core values, attitudes and behaviours  (depends on the client strategy).   The ultimate solution should be embedded into a decision support tool delivered by the discrete choice model. This decision support tool would be useful for:
    • adoption initiatives
    • marketing communications
    • corporate communications
    • research and development planning
  6.  Apply advanced analysis modelling to develop an algorithm that will predict and classify each customer (existing and future) to a certain segment
  7. Develop strategies and new business models to meet the needs of each segment

instinct and reason segmentations have driven the development of ongoing communication and marketing strategies for Australia’s largest banks, wealth management organisations, government agencies and not for profits, as well as for the largest agribusiness company in the world.

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