3. How To: Segment a Market:
Big Ideas:
- You aren’t your customer.
- Behavioral segmentation…duh!
- Your customers aren’t just “your” customers.
I’ve mentioned here before that for my money Roger L. Martin is the best strategy teacher in the world.
So seeing him enter the chat around market segmentation is a great opportunity to share Roger’s writing and to revisit a topic that I know needs more attention, especially right now.
How can I be so confident?
Because I’ve been working on segmentation with folks around the world and almost everyone has come back with a look of surprise at how revisiting their markets has helped them identify new opportunities.
Let’s do a quick primer on doing a good market segmentation this morning, shall we?
First, when you segment, you want to capture the whole addressable market. You start with everyone, not just the people you think are in the market.
This happens a lot and it is why opportunities are missed. It is also why personas are dangerous, you draw too many conclusions with too little critical thinking.
Second, you want to segment the market based on behavior.
Not demographics. Not color. Not some other knucklehead ideas that I’ve seen thrown around. A good marketer segments the market based on behavior.
How do you do that?
You can use a tool like the one I use, the meaningful actionable grid.
Third, slice up the market.
Again, behavior-based. Segments should be unique and a group of customers shouldn’t be able to exist in two segments. If they can, go back and start again. Just know, this doesn’t mean we are excluding folks, there is always spillover from one segment to the next.
That’s the top-level stuff.
I take people through a much more complex practice, but if you start here, you can achieve a lot.
Doing this stuff is important for two big reasons.
Number one, you aren’t your customer.
A proper segmentation forces you to get out of your head, thinking you are going to tell the customer what they want, and into the customer’s mind where you can see what they value and want.
Assuming you are just like your customers is wrong and dangerous because you can’t be. Once you start working on a product or service, you are too close to the situation to be objective. You know too much. You care too deeply.
So, you have to drill it into your head constantly, I’m not the customer.
Number two, the people that buy from you, no matter if you sell baseball, opera, theatre, primary tickets, or secondary tickets…they aren’t your customers alone.
Part of the process of doing a segmentation is that you get a better understanding of what you are competing against when they are thinking about buying a ticket. This can help you compete more competently for their attention in your marketing and their money with your products.
It is as simple as that because I often find that people don’t know who or what they are competing against. Plus, they assume a lot more loyalty than often exists and this causes them to take the second sale for granted.
Take aways:
- You aren’t your market so stop trying to think that way. Do the work.
- Your customer is a lot of folks customer. So you need to always keep in mind that you are constantly winning their business.
- Segmentation is something everyone needs to revisit right now. There are missed opportunities, left and right.