Like most things of value in this world, segmentation is used in a variety of ways by businesses today. The two most common applications of segmentation are reporting/analysis and targeting. Segmentation is often applied to reporting and analysis to help marketers understand the behavior of one portion of the population when compared to another. Segmentation is also used by virtually every marketer who is responsible for targeting their prospects and customers.
Segmentation is as much of an art as it is a science. It’s done a million different ways and there is no right or wrong. It is important, however, to understand the nuances of segmentation a bit before jumping in feet first. When helping our customers set targeting and segmentation strategies for their organizations, we often talk about three segment categories that are building blocks for a segmentation framework:
- Life Stage segments – These segments are used to classify your target audience into discrete segments which are mutually exclusive. These may map to a defined business process within your organization like a sales cycle, to your relationship with the individual, to the individual’s engagement with your brand such as recency or social media interaction, etc.
- Focused Target segments – Focused target segments are used for very specific targeting campaigns. Typically, these segments are based on a combination of Life-Stage Segments, behaviors and demographics.
- Discrete Population segments – Discrete population segments are used to designate a specific group of people you want to track and/or interact with over time. These segments are typically behavioral-based (e.g. – people who opened a savings account in June) and governed by a specific time frame. Therefore, this population does not change over time.
If you want to learn more about segmentation in Financial Servies, download this whitepaper. Co-authored by Gary Angel, President of Semphonic and Jennifer Wilson, Senior Product Manager at Webtrends, this white paper is thought provoking and contains some specific examples of segmentation in this industry.