Segmentations can be big endeavors—organizations investing time, money, and people, need to see meaningful outcomes. While it’s tempting, especially for seasoned researchers, to dive right in, solid up-front planning is critical when it comes to building a segmentation your organization will accept and implement.

With decades of segmentation experience, we’ve found the key to a successful outcome lies with engaging stakeholders early and often.  Follow these five steps to ensure alignment prior to questionnaire development.

1. Set expectations

Engage with end-users early in the process to clarify what the segmentation will and won’t do. Often time, LOBs have competing priorities which one segmentation may not be able to satisfy.  It’s much better to identify and address potential disconnects prior to getting started.  To ensure data quality (i.e., keep your questionnaire a reasonable length), you’ll likely need to negotiate trade-offs.  Consider using additional follow-up studies to gather additional insights that aren’t crucial to segmentation.

2. Understand relevant initiatives

Questionnaire real estate is at a premium so use it wisely. Examine relevant existing research to make sure you’re building on rather than replicating it.  Are there ongoing initiatives that could provide some direction?  For example, what marketing campaigns are planned, who are they targeting, and why?  Alternatively, is there upcoming work that could benefit by examining through the lens of segments—product development comes to mind here.

3. Learn from the past

Understanding how your organization has used (or not used) segmentation in the past can help you to avoid potential pitfalls. Examine past segmentation efforts in your organization.  What worked—and perhaps more importantly, what didn’t?

• How was the segmentation used? What decisions were made?
• If it wasn’t used, why? Was it overly complicated?  Was it too simplistic? Did it lack face validity or contradict how the organization currently sees the market?

4. Define success

It’s crucial to know how end users want to use the results prior to questionnaire development and analysis. What does success look like?  The answer will differ based on the end-user.  A product manager may want to develop products designed to meet target segment needs (an if you build it, they will come approach) while your marketing team might expect to pinpoint target segments within an existing database—two very different uses.

5. Identify your audience

Are there portions of the market that don’t make sense to include in your study? Alternatively, are there people that might not currently use your products or services but have the potential to in the future.  One obvious example of this is in the financial services sector.  Young investors might not have enough investable assets to be profitable, but given the stickiness of the relationship, it’s important to attract young investors who have the potential for future profitability (well after they’ve paid off student loans and saved up for a down payment).

Making the most out of your segmentation investment means more than choosing the right scheme—it means translating insights into decisions. Ask the right questions from the beginning and you’ll be on your way to helping your organization gain the clarity and focus the best insights initiatives provide.

Athena Rodriguez is CMB’s Senior Project Director and leads our Senior Resource Team.

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