Is now the right time to start a segmentation programme?

It's the question on everyone's lips. While some have adapted better than others, every brand saw major disruption due to the pandemic. There has been a significant consumer behaviour change from multiple lockdowns which will have created a significant knowledge gap for most businesses. The need to bridge this gap and get new robust data will have many brands questioning if now is the right time to embark on new segmentation, but many will be weary that segmentation represents a major programme of work and so many will be debating when is the right time. Here are our thoughts...

Squeeze the data you have

When presented with a business need which requires research, every insight professional should first ask themselves what data they already have that can get them someway towards an answer. If you’ve already got a Usage & Attitude Studies or a previous segmentation data set, then these are all great places to start. Squeeze the data you have today if you’re uncertain on whether you’re ready for a new segmentation programme.

“I know this is controversial, but my belief is that our insight industry isn’t backward looking enough! Huge amounts of primary research data – perhaps half of it – are forgotten about after a debrief presentation, and go completely unexplored. There is a massive amount of latent commercial potential in this data.” Dr Leigh Morris, Strategy Director

Focus on quick wins

Whilst every brand wanted to be as proactive as possible during lockdown(s), for many it’s been a waiting game as the global situation has evolved and changed. Now that lockdown is easing many will have their fingers crossed hoping that things will go back to the way they were before, but that’s unlikely.

According to a 2009 study published in the European Journal of Social Psychology, it takes up to 254 days for a person to form a new habit and an average of 66 days for a new behaviour to become automatic. This means that new consumer behaviour will likely be the norm for the foreseeable future after more than a year of lockdown(s). As new data becomes available, Insight Teams need to quickly identify the most profitable segments that are interacting with their brand today. It’s quite likely that that your new prime targets will relate to an existing segment, but perhaps what once was a secondary target is now your most valuable customer. Focus on quick wins around this segment’s buying habits and decision making progress and assume that the easing of lockdown won’t have a major effect for the next 3-6 months.

When to push the button?

There is no straightforward answer as to when will be the right time to launch a new segmentation programme. At some point brands will have to bite the bullet as they will begin to lose competitive advantage without a granular understanding of their consumers. We are seeing many companies act now to stay ahead of the curve, seeing greater benefits in reacting to new consumer behaviours today, rather than waiting until everything is ‘back to normal.’ This uncertainty highlights the importance of basing any future segmentation programme around consumer needs and motivations, as these are less transient than other factors. The needs of consumers are universal, and while the size of these needs will change and shift, they are likely to be consistent over time regardless of what future disruption may occur.

Don’t repeat old methodology

Most segmentation programmes will be useful for 3-5 years. If Covid will effectively force you to start over you may be surprised at just how much the methodology has changed in recent times. Artificial Intelligence and Machine Learning have advanced to the stage where dynamic segmentations are more easily applied to, and tracked alongside, CRM and transactional activity. One issue that hasn’t changed because of the lockdown, but is a key factor for the future, will be the issues around consumer privacy. More and more of our clients are looking to leverage their first party data to greater effect by tagging segments onto CRMs and other marketing tools and through the set up of hybrid and dynamic segmentation.

When you're ready for your next segmentation programme, why not turn to the experts? We have over 20+ years of experience working on more than 1,500 studies for brands across the globe. Get in touch to see how we can help you.

View our Case Studies