Segmenting your Customers – Static versus Dynamic

I stumbled across a post the other day by Scott Brinker, the President and CTO of ioninteractive.

Scott writes a really interesting blog call Chief Marketing Technologist – words that don’t typically, or haven’t typically, shared the same sentence.

He talks about ‘the most important choice’ in online marketing – between the unity of your brand and the individuality of your audience.  He means you have to choose how granular your marketing efforts are.  Do you slice your audience up into tiny segments, each with some unique characteristic, and serve them a tailored message?  Or do you stick to one or two segments and deliver a far less fragmented communication?

The first comment I would make, and with all due respect to Scott, is that I don’t think you need to trade off the unity of your brand.  Brands are multidimensional to begin with.  Whether you like to use Brand Onions, Layers, Pillars, etc.  to conceptualize it, your brand is made up of a core belief and around that (or under it or above it) different manifestations of that belief (values, feelings, attributes).  

I think Scott is talking more about the effort you need to go to as an online Marketer to segment your communication efforts by targeting a few groups or a few hundred!  You don’t necessarily need to trade off your brand unity for this, nor should you, you just need to find manifestations of your brand’s core idea that work for these segments.

But before you even go down this road, I think there is another very important strategic choice – whether or not an individual in your market is made up of multiple segments themselves!

I was recently doing some work for a major national restaurant chain.  They had a traditional segmentation that divided the entire market into five or six groups.  Typical groups you would think of – the family oriented crowd, the sports bar crowd, etc.  The problem was that while these groups represented a dominant attitude for an individual, it was only one of many.  We discovered the ‘sports bar’ enthusiast was eating out with his family on the weekend in a quiet and relaxed setting.  His ‘sportiness’ was still there, it had just been overshadowed by a different set of needs – relaxing, quiet, family time.  Talking to the ‘sports guy’ only about bar food and alcohol missed an entire other opportunity – family get-togethers.  One that happend to represent a GREATER proportion of his wallet.

I think there are lessons here for online marketers.  Especially because online tools are easily deployed for different needs.

Take Gmail for instance.  I use it both for work and personal email, but I use it slightly more for work.  If Google segmented me into a ‘work’ group it would miss an opportunity to sell me on personal tools.

it sounds simple when you put it like that. But most marketers shy away from defining their audience along overlapping need lines.  You are typically either in one segment or another, not both!

I’m not too sure how this idea changes Scott’s original representation of the trade-off.  In some ways it might make it easier.  Instead of focusing on the quirkiness of individuals, who all have traits that make them different, you just need to find out all the ways your product/service is being used/deployed. Consolidate your communications efforts around these different needs and allow individuals to float in and out.

The strategic question then becomes static segments versus dynamic need states?  

Who ever said marketing wasn’t complicated?

4 Responses to “Segmenting your Customers – Static versus Dynamic”

  1. January 31, 2009 at 6:35 am #

    Hi, Paul — thanks for the nod to my blog, greatly appreciated!

    I agree with you that “unity of brand” and “individuality of audience” are not necessarily direct trade offs. You can — and should — seek to address both in strategic marketing. My main point was simply that I think that’s a tough challenge, at least for most businesses, because there is some tension between those two forces, especially as an organization scales.

    The diagram I drew was trying to illustrate a separate but related point that technology has enabled a much greater degree of audience segmentation for marketers across the spectrum — but rather than making marketing easier, I think that’s created another dimension by which marketing is further complicated in its strategic choices. I think it’s great to have a far greater degree of choice, for sure, but it’s both a challenge as well as an opportunity.

    I like the way you describe it as a strategic question between static segments versus dynamic need states.

    And I agree, marketing is complicated. But it sure is interesting!

  2. Paul Soldera
    February 2, 2009 at 8:25 am #

    Hi Scott, for some reason this comment got caught up in a WP filter, sorry about that. Thanks for replying!

    I also wonder to what extent ‘lack of technology’ was simply masking complicated customer dynamics in the first place? In the sense that maybe this was always a complicated choice, we just chose to dumb it down because we didn’t know better? It’s fascinating reading old literature on customer segmentation and hearing people lament about the constraints of targeting. At some point the constraints become the norm and we all thought the norm was the right way to do things. I’d challenge the notion that any segmentation that doesn’t use technology to take into account a vast array of needs/behaviors is valid. Segmentation is one of those things the entire Marketing worlds needs to take a fresh look at in light of what technology now enables us to do.

    Thanks for stopping by.

  3. Steve
    February 3, 2009 at 2:16 pm #

    interesting indeed Paul…what is your take on a people and occasion based segmentation? The thinking is that people will have different need states that can likely define them, it is the occasion that sets up the what they want/need/look for at any particular time.

    My perspective is that any segmentation must include occasions in order for them to be actionable in this day and age – otherwise we assume the brand is a flat piece of paper, not the multi-dimensional onion we love to cook with.

  4. Paul Soldera
    February 3, 2009 at 6:05 pm #

    Hey Steve, yeah I agree. I have been increasingly turning towards occasion based segmentations. I think it’s a crucial thing to understand. The really interesting upshot is that to make it useful, you also need to move toward occasion based Marketing and coms. That’s a tough ask for some marketers who are so set on discrete segments.