How to pick a segmentation agency
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Transcript of How to pick a segmentation agency
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How to pick a segmentation agency
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The trouble with segmentation is that once you start looking…
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…you’re faced with endless agencies claiming to offer it.
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But be wary, the world is littered with mediocre segmentations
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But be wary, the world is littered with mediocre segmentations
or worse.
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How can you be sure you’re making a good choice?
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How can you be sure you’re making a good choice?
An agency with
real segmentation expertise?
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So if you’re thinking of appointing a segmentation agency, here are three areas
worth exploring…
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#1The methodology
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Technique has a
massive impact on segmentation outcomes.
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So make sure you ask
what technique they use
and why, and watch out for
bland, generic responses.
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And if they suggest focus groups…
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STOP RIGHT
THERE!
Qualitative data
cannot deliver a
meaningful
segmentation at all.
And if they suggest focus groups…
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In quantitative, the traditional and still most
commonly used clustering techniques
(such as K-means) have major flaws…
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You have to guess the right number of segments
1
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You have to guess the right number of segments
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It can produce different results from the same dataset
2
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You have to guess the right number of segments
1
It can produce different results from the same dataset
2
3
It often creates one big lumpy segment and a load of fuzzy, too-similar segments
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You have to guess the right number of segments
1
It can produce different results from the same dataset
2
3
There is no error-checking mechanism
4
It often creates one big lumpy segment and a load of fuzzy, too-similar segments
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Ensure that the clustering method used
can overcome these flaws and provide a
high level of accuracy.
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#2Variables selection
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Clustering can create segments from
any data you put into it…
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…but this doesn’t
mean the segments
will mean anything.
?
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It’s critical that your agency fully understand your business objectives and
market characteristics in order to select the right variables that will generate
meaningful segments that are useful for decision-making.
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#3Communication of segments
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Segmentation
generates a large
amount of data.
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But your agency should distil
the results to be easily
absorbed and used across a
whole organisation.
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The most important two questions the segmentation answers are
“who do we need target, and how?” and
“who should we avoid?”
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Once you have your targeting strategy,
you need to understand each priority
segment as a real person: how to interest
and engage them, and how to convince
them to buy and use your products and
services.
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Of course there is more to good segmentation than these 3 areas.
But any segmentation agency worth its salt will get all 3 right.
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Unfortunately, many agencies deliver great
creative outputs and workshops, but at the
expense of analytical rigour, potentially leaving you
with a vivid, but wrong or bland, set of segments.
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By asking some tough questions, you stand a better chance of getting a segmentation that’s
both vivid and rigorous.
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If you want to know more, please get in touch:
020 7842 6830
Visit our website: www.clusters.uk.com
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