"Market segmentation is widely regarded to be one of the key elements of modern marketing" - The Market Segmentation Workbook, Sally Dibb and Lyndon Simkin
Imagine you did a survey of the entire state of Utah and
found out that the most popular cereal was Cheerios. Ok, great, but what does
that mean? What can you do with that data? Well, not much.
Now imagine that you segmented Utah by age, gender, income,
and hobbies and found that women in their 20’s with an income below $50,000 who
are active runners, overwhelmingly prefer Special K. That data becomes much
more valuable when applied to a specific segment. The same idea is consistent
with web analytics. The deeper an analyst gets into a segment, the more
valuable the data becomes and the more likely it is to induce action. In the
words of Avinash Kaushik, “Segmenting allows you to quickly hone in on areas of
deeper dive from which will emerge key insights that will drive real and
meaningful action.” [2]
 |
| Photo Courtesy of: http://everythingtechnologymarketing.blogspot.com |
The deeper and more precisely you can segment, the better
chance of producing data that can actually benefit your company. Segmentation
allows analysts to get past the surface and start to truly understand customer
behavior, preferences, and engagement. Through this customer understanding,
corresponding actions and decisions can be implemented. As stated by Garry
Pryzklenk, “Get closer to the customer by implementing non-personally
identifiable customer “keys” that can help turn “unique visitors” into
“customers”[3].
There are a variety of general segments that analysts can
use to segregate their data. For example, looking at paid search vs. organic can be very beneficial in looking at the different behaviors between the two
groups in terms of customers you are paying for and customers that are “free”.
However, it is when analysts dive beyond the general segments that a lot of
critical data starts to materialize. [2]
When focusing on more specialized segments, in can often be
difficult to know where to start and how to group customers. Avinash Kaushik
recommends focusing on three different categories: 1) Acquisition 2) Behavior
3) Outcome. [1] Using these categories as guidelines, analysts should then pick
subcategories that relate to direct organizational goals and issues within the
company. With these three categories in mind, Kaushik recommends the following
process [1]:
- Ask
the question to identify what's important / high priority for the
business.
- Create
a segment (and then micro segments) for that one thing.
- Apply
on the relevant reports to measure performance using key performance
indicators.
- Take
action. It will have an impact!
Garry Pryzklenk states that, “Aligning with the business
equates to careful attention to detail and making your audience appreciative of
analysis and open to change.”[3] Segmenting based on business goals leads to an
analysis that is more likely to be well received by upper management. Showing
segmented data to your managers and decision makers allows your data to tell a
clear story that can easily portray real and meaningful conclusions without an
in depth understanding of web analytics.[3]
The bottom line is that segmentation is key to effective
analysis. It is how data transforms ideas into actions that can ultimately
improve your business. Do you have any other tips on segmenting data?
References:
1. Kaushik, Avinash. Web Analytics Segmentation: Do Or Die, There is No Try!
2. Kaushik, Avinash. Excellent Analytics Tip#2: Segment Absolutely Everything
3. Pryzlkenk, Garry. Top 10 Web Analytics Segmentation Tips
Very strong and well thought-out argument, kaitlin.
ReplyDeleteGreat post, thanks. I like the end sentence, "segmentation is key to effective analysis," and I would also say that effective analysis is key to accurate segmentation.
ReplyDeleteNice post Kait! This advice will be really helpful for our field study client. I like the advice of Kaushik to focus on the three particular segments. Great job!
ReplyDelete