Segmentation for tomorrow, today

We were interested to read the recent debate over segmentation in Research-Live – “The role of segmentation in modern businesses is fundamentally changing” - and whether traditional approaches are of any use in today’s digital, behavioural age.

The thrust of the argument seems to be that traditional, often attitudinal approaches are limited, they cannot and do not talk to practical databases or tap into the wealth of insight that could be available from ‘Big Data’ sources. The ideal segmentation of the future will therefore make use of these tools and leave survey data behind.

The article concludes, after inputs from various sources, that actually the segmentation of the future should be a hybrid of traditional and modern methods.

This assertion struck a particular chord with us, as a multi-sourced, multi-dimensional, data-agnostic, flexible and pragmatic approach is the one we have always taken to segmentation, over many years… it is not the future, it exists already. What is new is simply the range of sources of potential data.

We would agree with Added Value’s Paul McGowan wholeheartedly, that the creation of the segmentation model is only the start, the application and embedding throughout the organisation is key. We would go further and say that the very beginning of the process is crucial – who needs the segmentation, what are they going to do with it (short term, long term), what change does it need to drive in the organisation; ultimately, how will it repay the business’s investment (in both time and money).

We have always known we have to encourage our clients to invest serious effort up front to make sure a segmentation lands successfully in their business. In addition it is even more important in these days where data has such a central role in how a business works and markets itself, to make sure that the segmentation solution is truly fit for purpose, fitting seamlessly into other processes; to complement, build on and add value to other existing data sources is increasingly necessary and powerful.

Today of course, in this age of Big Data, more computer power, the social media explosion and our ability to both qualify and quantify it,  there are even more potential sources of information for a data-agnostic agency to work with. The sum can be truly greater than the parts. The only risk to building a multi-faceted tool is in creating an excessively complex and introverted model, one which fails to see the bigger picture or which has the vision to inspire.

So to avoid this, whilst the landscape may be shifting, in our experience the same principles apply today as they ever have done…

Firstly, what business challenge are you trying to solve or provide inspiration for, what hypotheses do you have to address your business challenge and what data do you need to feed into these?

Then, let’s use whatever data fits, wherever it comes from – explore it, collide it together, fuse it if helpful and build the story, the insights and inspiration – the implications… but don’t be distracted and tempted to spend pointless time and money on data sources which are at best duplicative or nice to know and at worst irrelevant.

Just because a new and shiny data source makes your eyes light up, it doesn’t mean it is necessary or appropriate for every occasion. Taking the time upfront to understand the business challenge at hand will enable you to understand whether it is friend or foe.