What is the best market segmentation approach for your research?

1 Define your research objectives

Before you start segmenting your market, you need to have a clear idea of what you want to achieve with your research. Do you want to identify new opportunities, evaluate existing segments, test new products or campaigns, or optimize your pricing or distribution? Your research objectives will guide you in choosing the most relevant and useful segmentation criteria and methods.

2 Choose your segmentation criteria

Segmentation criteria are the variables that you use to group your customers into segments. They can be based on different dimensions, such as demographics, psychographics, geographics, behavioral, or needs-based. Depending on your research objectives, you may want to use one or more of these dimensions to segment your market. For example, if you want to understand the motivations and attitudes of your customers, you may use psychographic criteria, such as personality, lifestyle, values, or interests. If you want to measure the usage and loyalty of your customers, you may use behavioral criteria, such as frequency, recency, amount, or benefits sought.

4 Validate and profile your segments

Once you have created your segments, you need to validate and profile them. Validation means checking that your segments are meaningful, measurable, accessible, and actionable. You can use various techniques, such as cross-tabulation, chi-square test, or ANOVA, to test the validity of your segments. Profiling means describing your segments in detail, using both the segmentation criteria and other relevant information, such as customer satisfaction, loyalty, profitability, or potential. You can use various tools, such as tables, charts, or personas, to present your segment profiles.

5 Apply and monitor your segments

The final step is to apply and monitor your segments. Application means using your segments to inform your marketing decisions and actions, such as product development, pricing, positioning, promotion, or distribution. You need to align your marketing mix with the needs and preferences of each segment, and communicate your value proposition effectively. Monitoring means tracking the performance and changes of your segments over time, using metrics such as market share, sales, revenue, or customer feedback. You need to evaluate the results and impact of your segmentation strategy, and adjust it as needed.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?