Despite the fact that segmentation is widely adopted and has a long history of ROI across industry, it is not without its detractors.
There will undoubtedly be sceptics within your organisation, so it is worth having a well-articulated philosophy, a water-tight rationale and a well-defined set of use cases.
One of the most frequent questions we are still asked today is “if I target this group, does it mean I alienate everyone else?” The answer is of course no. A company we have worked with on segmentation for a decade found that 75% of their customers came from segments other than the one they were targeting. This does not mean segmentation isn’t working! Instead, it means that there are plenty of consumers outside of your core target audience that still find your brand relevant.
Differentiating your offer by targeting and positioning against a particular segment does not mean you become less relevant to everybody else. It means you become more relevant to a clearly defined, valuable consumer group. This wider audience may not have a perfect fit with your brand’s strategic direction, but there are still dozens of ways to attract them to purchase.
A crucial step when targeting brands against segments is to understand the subset of the market that your brand is relevant for, even if they are not your primary target consumer. It is important to consider both the core target, and how any activity designed for this group will impact the wider market too.