So you know by now that we attempt to shake things up a bit and challenge people to think differently about topics and their impact on business. Our topic this week is no exception and with the skills of our moderator, we are going to test those limits. This week’s discussion is around market segmentation and how social can change how we approach it.
Market segmentation is more than what markers do with homogeneous products before deciding which actress to use in the commercial to best reach a desired consumer group. Market segmentation is defined by Wikipedia as:
“A market segment is a sub-set of a market made up of people or organizations sharing one or more characteristics that cause them to demand similar product and/or services based on qualities of those products such as price or function.”
This is a good start as a definition, however this does not even begin to scratch the surface. How do we take this to the next level? To explore ways by which to re-imagine consumer grouping, we must get past the traditional segmenting like demographics, geographics, income, even behavioral. For many marketers, they look at data models that break out behavioral with layers of demo and geographics mashed in. This modeling then determines a budgeted ad spend for a period in time like 3 or 6 months where the messaging is developed, pricing assigned and commercial created. The problem is that by the time the ads hit, the data models have shifted and the intended groups have moved on. Now with peer reviews and endless product content the real-time web is heavily influencing consumer preferences that continue to change with increased velocity.
Savvy marketers have been using insights for more than just marketing also. Saavy marketers use segmentation for product development, pricing, marketing channel, and even customer retention. Using the last example, customer retention, the segmenting considers factors like profitability, strategic fit, product version and longevity. Can you service your customers differently with better targeting for profitability or would you be more proactive with customers who were ripe for renewal or upgrades? Now consider going beyond your internal gates and imagine the results if you combined internal factors along with external or social listening capabilities. Maybe that customer who is really loud socially is a drain on your profitability.
So what this means is that the social web is having a profound affect on preferences, therefore insights that are not derived in near-real time are simply missing the mark. If we open our research and insights departments to the social web, how can they can they use these tools that have never been considered before? Every company will find different value in different social instances, however there are some great new possibilities that are emerging:
- What if you titled the buckets of your listening tools with Underserved, Disenfranchised and Contemplators. Could you use that insight to build better products or price more according to near real-time inputs?
- What if you targeted people who played Mafia Wars on Facebook or joined relevant fan pages. Could you use those applications for consumers to self segment themselves and find commonalities?
- What if you targeted people who used certain hashtags (#) on Twitter or similar platforms. Could you infer commonalities from everyone who tweeted #farm, #beer or #sweets?
Understanding and using social segmentation is challenging. The pace at which social moves and the pace by which people flutter around digitally are simply exhausting. Marketers like General Mills and Coke are early adopters of social segmentation and blazing a trail for others to follow. This week’s moderator Ken Burbary is going to help us sort out this topic. Ken manages the social media duties for Ernst & Young where he develops these types of solutions for their respective clients. The topic this week is:
TOPIC: Social and the New Model For Market Segmentation
Q1) Is traditional market segmentation still relevant?
Q2) What should be more important for Brands: social segmentation or engagement?
Q3) How are you segmenting your customers with Social Media?
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