Which type of segmentation is best? – Part 1

This article, written by Neil Mason, was originally published on Clickz.com on 12/02/10 and is republished here with permission.

One of the things I like about my job working is a customer experience consultancy is that I’m surrounded by people with a very different outlook on life. Our user experience consultants tend to come from a behavioural psychology background and are great at using qualitative research techniques such as lab testing, eye tracking and ethnographic studies to get into the mind of users and to understand what makes for a good or bad experience. That’s obviously a different set of skill and tools from our quantitative, analytical approach to solving problems using vast quantities of data. Each approach is complimentary to the other with quantitative data good at asking the “what” and “when” type questions and qualitative techniques good at helping to understand the “why”.

Every now and then we get into one of those interesting conversations about which approach is best for solving a particular type of problem. Last week ones these conversations was around the topic of segmentation and which types of segmentation are best for addressing particular issues. Segmentation is one of those popular words that’s used a lot these days in the digital marking world and is usually means different things to different people.

Segmentation is the process of creating groups of individuals (customers, website visitors, prospects etc) that have something in common. Importantly what one group has in common is then different to the other groups. The purpose of segmentation is to make you, your marketing communications, your website experience, your product offering on so on more relevant where possible to these different groups. But how are these groups defined? There are three main ways:

• Demographic segmentation
• Behavioural segmentation
• Attitudinal segmentation

Segments can be defined by demographics, ie based on who someone is. Typically classical marketing approaches to segmentation use demographics as the basis as it can then be used for targeting purposes. Demographic segmentation in online can also be useful. For example, “gender” can be a useful segmentation split as the way that people behave online can be very different depending on whether they are male or female. So be able to segment your audience by gender, age, income etc can be really useful.

Another approach to segmentation is behavioural segmentation. This is not classifying people according to who they are but on the basis of what they do. This type of segmentation approach is very popular in digital marketing as it’s quite easy for us to understand how people behave as we have loads of behavioural data. Again it can be a very powerful technique to group people according to different behavioural criteria and to use that knowledge to improve the effectiveness of campaigns or to present different website experiences. For example, the way that people who are on their first visit to a website is often very different to the way that they behave on a subsequent visit and their needs are also often different. So why not present them with a different experience? Behavioural segmentation lies at the heart of personalisation.

Finally attitudinal segmentation is about classifying people not according to who they are, or what they do, but about what they think. Attitudinal segmentation is about getting into the minds of customers and understanding what makes them tick. People of different genders and ages may have similar needs when it comes to interacting with product and services, they may be trying to pursue the same goal or trying to achieve the same outcome. Often attitudinal segmentation is used for the development of “personas” which are used as tool to help designers get closer to the people they are designing for.

So which type of segmentation is best? Well, of course, the answer is that “it depends”. What problem are you trying to solve? What will you do with the segmentation when you’ve got one? The other questions then are “What data do I need and where do I get the data from?” I’ll be looking at the answers to these questions next time. Til then…