“So this seems on the face of it quite an easy thing to get right, when in reality, it's an easy thing to get wrong.” Leigh Morris

When conducting segmentation programmes, there is often a trade-off between breadth of audience and depth of understanding.

As an example, you might start with a simple premise; Lets engage with consumers who have making purchases in our category or likely to have been thinking about this.

On paper this sounds like a straight-forward idea but raises the issue around engagement. Many consumers who buy products in your category may not give the matter much thought and have low engagement. Doubtless these low engaged people contribute a decent share of value to your category. Does this mean you have to find ways in which to engage them and depending on your category, will the squeeze be worth the juice?

There are many circumstances in which a segmentation should ignore this low-engaged customer.

Real-Life example:

We have been working for several years with a global fashion retailer. In 2017 they worked with a global agency partner to carry out a segmentation programme based on consumer’s needs and motivations in relation to fashion. The ultimate goal of the programme was to help with brand portfolio strategy, giving a clearer definition of target consumers for their different brands.

What the agency found was that there were a large amount of consumers who had little interest in fashion, people who buy clothes for practical reasons, to keep warm for work etc. These consumers were not seen as desirable and so amongst the many segments that were created only two were used in the final framework. This accomplished the exact opposite of what the brand wanted as it meant all the brands were focused on a small subset of consumers.

We stepped up and delivered a style-based segmentation that actively is designed to help avoid this engagement issue through a combination of needs-based data and brand perception. We were able to accomplish this whilst excluding the low engaged consumers from the sample and now the client is happy and able to use their segmentation for actual brand portfolio management.

Sometimes there is no harm in including those consumers who have low engagement but typically, they use up a large part of the sample which means you are wasting that sample because you’re not going to form actions around them. Often this group is ignored and moreover they actually constrain your framework, this means that less obvious dimensions that can actually differentiate you from competitors are missed by the segmentation algorithms.

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