Most Segmentations
Become Outdated

Segmentation analysis is one of the most powerful marketing tools available. It used to be that segmentations were durable: you only needed to re-do your segmentation once every 3 to 5 years, depending on your category's volatility. That’s all different now. Since the global Covid-19 pandemic, so much has changed in so many industries that most segmentations became obsolete, for example in retail, financial services, hospitality, and technology, just to name a few. It is now more important than ever to update your segmentation to understand how your segments have shifted and how your marketing needs to adapt.

Historically, there have been three different types of segmentation research: demographic (comparing gender, age, income, or purchase volume), psychographic (based on internal characteristics, such as personality, values, beliefs, lifestyle, attitudes, interests, and social class), and behavioral segmentation (based on customer purchase and decision-making behaviors). The problems with each of these are similar.

Just because people share demographics does not mean they belong to the same segment or are interested in the same things. And while psychographic segmentation often results in intriguing segment names like “old money elites” or “stressed-out over-achievers” they don’t result in variables that can actually be used for targeting. Finally, behavioral segmentation is great for your customer base, but does not take into account that your customers may be different than the market as a whole.

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By combining demographics, psychographics, and behavior, you gain a better understanding of your customers

Zeitgeist Research has created a segmentation approach that gives you the best of all three approaches. By combining demographics, psychographics, and behavior, you gain a better understanding of your customers, a perspective on the market as a whole, and a way to connect with prospective customers.

Phase 1 & 2

Groundwork &
Qualitative Foundation

While most segmentations begin with the customer, we start with you and your company. Bringing in key partners from Marketing, Customer Database Management, User Experience, and Product Management, we begin by understanding what you know. What is the target market, and what variables do you use for targeting? Through a series of online meetings, we work with your team to answer these key questions. Next, we conduct qualitative research, most likely in-depth interviews, to ensure that we have a complete picture and have not missed any critical behaviors that will become important in evaluating the entire market.

Phase 3

Total Market
Segmentation

Using our model based approach , we survey and divide the total addressable market into multiple segments. Next, we create a typing tool that helps you assign your current customers and prospects to segments. This is basically a set of questions or an algorithm for classifying new respondents into existing segments. Finally, we also develop media targeting markers that will help you find target segments in the marketplace.

Phase 4

Customer
Segmentation

Finally, we get to where most researchers begin: your customers. The first step is to use the typing tool to assign your customers to the segments identified in the Total Market Segmentation. Second, we assign each segment an economic value based on your internal sales data. Finally, we compare your customer base to the total market segmentation to identify weaknesses and gaps and to strategize opportunities for increased revenue and sales frequency. We then use the media marker tool to target media and messaging for specific segments of prospects and customers.

Phase 5

Personas

Returning to qualitative research and focusing on the highest value segments, we then develop personas for each key segment. These personas create a deeper understanding of the customer and their motivations and will guide marketing tactics. Finally, we conduct a final online workshop to advise you and your partners from Marketing, Customer Database, User Experience, and Product Management on marketing strategies, tactics, and how to roll out the segmentation throughout your organization.

By using all three segmentation approaches, we can develop the complete picture: your customers, their relationship to the market as a whole, and how to market to existing and new customers. One of the key drivers of our approach is to ensure that you can take action at the end to improve your business outcomes, and we do that by ensuring our segmentation is based on your key targeting variables.