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10 practical tests to improve customer segmentation

Author's avatar By Expert commentator 04 Jun, 2013
Essential Essential topic

Review the quality of your audience segments with this checklist

This blog post first appeared in the Arts Marketing Association’s, Journal of Arts Marketing, and we are now sharing it with Smartinsight's readers. For more free resources, case studies, research and toolkits to promote art, culture and heritage visit culturalhive website

In an ideal world we would treat everyone as an individual and tailor and promote our offer accordingly. But this is impractical. Treating everyone as an homogenous mass however is ineffective - one size does not fit all. Segmentation provides us with a happy medium.

Segmentation is a fantastic way of reaching different people with different messages and can vastly improve how you cater for people. It means you can be strategic about audience growth and development of audience relationships.

Get it right and segmentation should provide true market insight that will lead to tangible results in audience development, organizational development and income.

I hope you find these 10 tests that I use to assess the quality of segmentation useful.

  • 1. Segmentation needs to be practical

Segments need to be sufficient in size to make targeting them worthwhile your effort and they need to be in a position to engage with your offer. Having too many segments will also make managing your strategies tedious. Too few and it won’t give you the granularity you need. Between 5 and 8 segments tends to work best in many cases. In order to devise coherent strategies and develop long-term relationships, the segments should also be mutually exclusive – each individual can only sit in one segment.

  • 2. Segments must be discernably different

When segmenting your audience (or potential audience) the first thing is to make sure the segments have discernably different needs. If one segment has no distinguishing differences from another or they all respond in a similar way, you will end up with homogenised strategies, which defeats the point of segmentation.

  • 3. Don't confuse behavioural clusters with segments

In Arts marketing for example, the Box Office database holds detailed information on behavioural patterns (performances selected, seat choices, frequency, party size, planning horizons, geography and so on). However this only describes WHAT your segments are CURRENTLY doing. It can’t tell you WHY they do these things. People may frequently move cluster but they shouldn’t frequently move segment. To be really effective, segments should be defined by WHAT each seeks to get out of the experience.

  • 4. Use attitudinal segmentation

Not all C2DE families share the same needs and motivations, the same applies to ‘young people’ or BAMEs.

Using demographics as a basis for a segmentation system makes for simple evaluation, but can’t give you everything you need to inform planning. Attitudinal segmentation provides you with deep insight into your audiences.

Understanding what drives audiences, how they want to be made to feel and what motivates their involvement, enables you to identify and effectively target groups of individuals with shared values. This puts you in a position to influence their behaviour and deliver deeply satisfying experiences.

  • 5. Segmentation should lend itself to differentiated strategies and campaigns

The same production or exhibition or product can appeal to a number of different segments for different reasons. One may seek primarily social outcomes, another driven to learn something new and a third be looking for emotional resonance. These three segments will recognise different benefits from the same work. They will respond to different messages via different platforms and be influenced by different factors.

Differentiated campaigns with messages optimized to resonate with a particular segment are more effective than a generic message aimed at everyone but speaking strongly to no one.

  • 6. It should lend itself to development of products and services

As well as increasing your ability to reach segments, understanding what they want to get out of the experiences you offer, puts you in a position to the best experience and to shape the audience journey. Front of house ambience, customer service, catering, learning opportunities and merchandise can all be developed to cater for priority segment needs.

  • 7. Remember to consider everyone in your priority segments

With limited resources the easy, obvious but potentially disastrous solution is to contact just those who are most actively and most recently engaged. For a time this might work but rinse and repeat this narrow selection process for any length of time and the result will be chronic audience-underdevelopment.

Good segmentation goes beyond defining people by their ‘lapsed-ness’ and to understanding why they might engage. While you don’t need to target absolutely everybody, you do need to be able to identify where the greatest potential lies and this will not only be in those that have most recently visited.

  • 8. Great segmentation doesn’t live in the marketing department

A segmentation system delivered by marketing to other departments will often fail to become embedded within the organisation. Segmentation needs to involve everyone and belong to everyone.

In order to be immediately and intuitively recognisable and credible across departments the segmentation process has to be iterative with everyone involved in identifying then and fleshing them out.

This way it will provide a common language for talking about audiences – bridging the understanding of marketers, programmers, front of house, learning, fundraising, hospitality – putting audiences at the centre of the conversation.

  • 9. Build it into your ongoing research

Segmentation, the gift that keeps on giving… whatever research you are conducting or data you are analysing, building your segments into this means you immediately have a more subtle and granular understanding of the outcomes.

Rather than 20% of our audiences think X or do Y, you now know which segments are displaying which behaviours or opinions, giving you further insight into why this may be the case, and how you can respond to the findings.

  • 10. You need to be able to monitor and evaluate your success

This should perhaps be my first, not last point. As with all evaluation, it needs to be considered from the get-go.

Make sure you’ve got mechanisms in place to monitor what works best, where the greatest return on investment lies, who is responding, which messages resonate with which audience segments via which platforms.

This means you can adjust your strategies and change your messaging as you go. Segment evaluation also helps you prioritise and plan developments based on how well you are currently meeting the needs of your segments – a virtuous circle of improvement.

Culture Segments

Culture Segments is Morris Hargreaves McIntyre’s whole-of-market, psychographic segmentation system for arts, culture and heritage organisations.

The system draws upon a decade’s leading-edge practice helping our clients to truly understand and meet the needs of audiences for arts and heritage. It is based on people’s cultural values and motivations with the principal objective of providing the sector with a shared language for understanding the audience with a view to targeting them more accurately, engaging them more deeply, and building lasting relationships.

There are eight Culture Segments including everyone who is in the market for culture. Full pen portraits and data on each segment are available to download for free.

These segments can also be tagged at record level in Box Office systems - please contact me for further details.

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