The other day I was leading a meetup centered around lean approaches to marketing (mainly centered around technology).* We were discussing finding customers in the beginning stages of a new product. In marketing, we do this through segmentation, meaning finding a group with similar characteristics that can be placed in a smaller group based on these similarities (then creating positioning and messaging based on them). How these similarities are measured and what they are creates your segment. When starting with a large group of people, in order to understand them, you must segment them. Or at least, that is what my data analyst friend believes and lives his everyday life by. When the meetup group got on the subject of segmenting and understanding it from a real world perspective, I couldn’t help but tell his story.
Let’s call my data analyst friend Rob. Rob is a 31 year old data analyst who focuses on consumer behavior. He literally spends his days segmenting customers based on large amounts of data. So, when he is doing other activities, he naturally tends to do the same. I luckily get to hear how his mind works on a day-to-day basis by catching up for coffee every Sunday. This is how his real world data segmentation played out last Sunday (and turned into the best example of market segmentation for my meetup group, increasing my popularity):
“Since I moved into a new apartment, I had to go to Ikea yesterday. As I was walking through the isles, I started to observe the types of people that were in Ikea with me. Naturally there were many different types of people. Although, in order for me to get a better understanding of who was in my company this fine Saturday, I decided to segment them.
There are 4 types of people in Ikea:
1. Young couples- holding hands, happily shopping, engaging with each other
2. Older couples- Reading from a list, one partner is often off gathering as the other mans the cart
3. Self-conscious singles- single people feeling awkward about being at Ikea alone and longingly staring at the couple
4. Confident singles- Single people who feel comfortable shopping at Ikea alone, looking to get what they need and bounce”
From his hilarious observations, I couldn’t help but think of it with my marketing cap on. With each segment comes a differing marketing message that could get more specific. Now, Ikea is a very large company that has differentiated in many ways (pricing, design, etc), so it is hard to think back to when they had to decide on one segment to capture (before taking over the market). For those of you who have read the Ikea book, you will likely know what they chose to segment, but since I haven’t lets take each of the segments above and look at how to segment.
1. Young couples
-often young professionals
-value their friends
-go to bars and clubs
-play team sports
-starting out, mid-level median income
-interests include sports and music
-likely digitally savvy
How do you get to this segment?
Campaign could be: Mobile app for design inspirations from your life with friends.
Messaging could be: “Set up a beautiful foundation together.”
Now, let’s look at our singles:
1. Self-conscious singles
Messaging: We all get our furniture somewhere, make yours Ikea.
2. Confident singles
Messaging: Be you in your home. Help us be you.
Now, all of these are made up off the top of my head, with really not much thought to Ikea’s positioning, but they exemplify the importance of segmentation. When you first develop a product and someone asks you, who is your target market, do not say everyone. Because, if there is anything Rob can show us, it is that you can not understand your customer (or potential customer) without segmenting— even if you happen to do it at Ikea.
*The term lean comes from manufacturing and was recently repurposed for software development. The principle of lean is about eliminating space, moving quickly, and iterating by learning as quickly as possible.