Customer Segmentation Consulting Builds Strong Brands

Customer Segmentation Consulting Builds Strong Brands

3 Strategies to Create Focus & Initiate Growth

Customer segmentation consulting is often a foundational building block to a strong brand strategy.  Robust customer segmentations use advanced analytics to identify distinct groups of consumers based on one or several of the following inputs:

  • Demographics (e.g., age, gender, marital status etc.)
  • Psychographics (e.g., lifestyle attitudes, key motivations for using category etc.)
  • Behaviors (e.g., brands purchased, frequency of purchase etc.)

Developing a customer segmentation is a large financial and time investment that requires specialized skillsets. Often, business leaders turn to customer segmentation consulting firms to help.  There are many benefits to using a customer segmentation consulting firm, but the most important is that they bring research and strategic expertise. 

Customer segmentations are complex quantitative studies that require expertise in not only designing the study but also interpreting the results into actionable recommendations that will drive growth across the organization. There are three areas where customer segmentation is often leveraged to drive organizational focus and growth:

  1. Optimizing marketing & user experience
  2. Developing a robust profile strategy
  3. Identifying innovation opportunity areas

We will explore each of these three in detail below.

Customer Segmentation Consulting: Optimizing Marketing & User Experience

In today’s world, brands have the ability to reach consumers at an unprecedented rate – TV is not the only avenue. Brands can develop targeted social media campaigns, set up algorithms and deliver customized services to users, utilize digital tools to create tailored messaging, etc. The possibilities are endless (and sometimes overwhelming). 

However, knowing the right thing to say to consumers at the right time to lock in the sale is not easy.   What customer segmentation allows you to do is to get a holistic understanding of the consumer landscape – what are the key motivating factors for distinct groups of consumers, and what are they looking for from brands in the categories you play in.  Getting this foundational understanding can help your marketing team not only optimize their current communication strategy to reach their core consumer base, but also start to map out what should be your messaging and user experience strategy to reach expansion targets.  What resonates with customers and what equity bridges need to be built to drive awareness and ultimate conversation?

Here are two examples of industry leaders using customer segmentation to optimize the online user experience for different consumer groups

Customer Segmentation Consulting Builds Strong Brands

Customer Segmentation Consulting: Developing a Robust Portfolio Strategy  

Companies can also leverage customer segmentation to develop or refine their portfolio strategy.  The goal is to have brands play in different spaces – with distinct value propositions targeting different groups of consumers and needs– so that you are optimizing revenue and reach.  Playing in the same space will untimely result in brands within your portfolio competing against each other and cannibalizing sales. 

Customer segmentation can also help identify portfolio gaps – entire groups of consumers that are using the category but not necessarily your brands.  Understanding if your current brands can stretch to reach these consumers and/or if a different brand is required to “win over” that consumer is ultimately a strategic decision that should be grounded on consumer insights and assessment of current brand equity.

Here is how Clorox used customer segmentation to align its brand portfolio to distinct targets driving growth across brands.

Customer Segmentation Consulting Builds Strong Brands

Customer Segmentation Consulting: Identifying Innovation Opportunity Areas  

Customer segmentation is extremely powerful when coupled with a need state segmentation.  Unlike a customer segmentation, a need state segmentation is based on usage or purchase occasions with the clustering inputs being product benefits sought during a given occasion.  This allows teams to identify why each consumer segment uses the category. 

This approach unlocks tremendous opportunity, as there might be potential needs among attractive consumer targets that your brand is not satisfying.    Mapping out innovation strategic growth opportunities to better meet the needs of core and expansion targets can be a major game changer and avenue of growth.

Here is how Gatorade used customer segmentation to develop their innovation strategy.

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