Have you conducted shopper research projects? If so, have you sometimes been less than energized by the results? If so, you are not alone.
Too often a first piece of shopper research can lead to not much more than a large PowerPoint deck and a vague feeling of disappointment.
The agency reels off a whole host of facts that tell you that shoppers do this and shoppers think that. But none of it feels new, and none of it seems to feel like its leading to any new action. There is little insight. Has this ever happened to you? There are lots of reasons for this, but in my experience there is nearly always one thing that causes this to happen. Poor segmentation. The good news is however, that segmentation can often come to the rescue of an average study. Even if the original research wasn’t ideal, a new segmentation approach can often turn dull data and charts into bright shiny insights.
It’s ironic, and not a little sad that so many researchers and practitioners seem to suck at segmentation. After all, it lies at the heart of marketing (how can you target, if you don’t have segmentation?) I’m not sure why, but I have a suspicion that a plethora on articles on bland generic marketing segmentations has taught too many marketers that segmentation is now ‘off the shelf’. In the particular case of shopper marketing, retailers developing their own segmentation models perhaps encourages shopper marketers to believe that developing bespoke segments is redundant.
Use generic segmentation models at your peril
The often excellent Mark Ritson nails this in his lovely rant recently about generational targeting (e.g. millennials): I particularly love the idea that, on average, millennials have ‘0.3 kids, two-thirds of a degree and one testicle each’. This type of segmentation is lazy stereotyping, and the use of any generic segmentation is likely to lead to generic outputs.
Mark brilliantly skewers the nonsense of such generic segmentation: but doesn’t give much of a clue as to how a better segmentation might be created. So how do we go about creating a better, bespoke, segmentation model?
Make sure your segmentation model is valid
Firstly, shopper segments need to fit a certain set of criteria to be valid.
Homogenous – they must be similar
Differentiated – they must be markedly different from the rest of the universe
Measurable – we need to measure them if we are to measure our effectiveness
Marketable – if we can’t market to them what is the point?
Let’s test the idea of millennials being viable with this test. Here’s a stat I pulled from an article recently, regarding millennials and shopper marketing. I could have picked any of many thousands: but let’s take a look at this one.
One-third of Millennials … use a wide variety of shopper media frequently. But an almost equal number … almost never use shopper marketing.
Ok – so we have a segment which is, immediately, heterogeneous in their use of shopper marketing. Hmmm. Not looking good as a viable segment. By the way, on the basis of this, both of my parents could also be millennials. My Dad never uses any shopper tools other than a shopping trolley. My mum wields her iPhone like a weapon from aisle to aisle. So millennials don’t appear to be that differentiated, either!
Choose a segmentation model that creates value for you
Secondly, the shopper segmentation model needs to be valuable. There are many to choose from. So which type of shopper segmentation should be chosen? I share many of my favorites in the book I wrote with Toby Desforges. For me, it depends, but the simple answer is that to which segmentation creates the most value. Sometimes it’s hard to know at the outset, so there is a degree of iteration in the process. When we work with clients, we cycle through a number of different segmentation approaches, tried and trusted ones and new ones too. After a fair amount of hard work we find a segmentation model that works. How do we know? Because value leaps from the page. Interesting things start happening in the data. And that is when insights begin to appear.
It’s never too late to rework data into a new segmentation
If you’ve have disappointing shopper research experiences, please share in the comments section. And if you’d like to learn more about how we can help turn your grey generic shopper data into dazzling insight, drop me a note!
