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May 26, 2008

Data chart of the week: social profiles for elements of a segmentation

by Josh Bernoff

So far, all of our Social Technographics Profile examples have used consumer behavior or attitude variables, like a comparison of car owners by brand or an analysis of Alpha moms. But we're finding, increasingly, that clients don't want to hear about the profile of the customers. They want to hear about a profile of their customer segments.

Most companies that sell to large numbers of people have segmented their customers. A retailer analyzes its shoppers and finds some come for convenience, some for price, and some for selection -- and some because their mom shopped there. Or an electronics manufacturer creates low-end easy-to-use products for the technology laggards and high-end sophisticated products for the early adopters.

Segmentation is smart if you use it to design products and marketing plans for different groups of customers. If you're growing a product line, it may be essential. Typically, a research project leads to customer insights, which leads to a segmentation, which leads to actions based on those segments. So when creating a social application for these segments, you need to ask -- which strategies apply to which customers?

Here's a good example. A large communications company had already segmented its customers and came to us with segment descriptions. Using the descriptions, we profiled three of the segments. The results are shown below. (The client's name and the descriptions of the segments are proprietary, I can't share them.)

stp segments

What would you do if these were your customer segments?

Here's what we told the client.

First, the two segments shown here in blue are extremely active with social technologies -- some of the most active groups we've seen. We recommended creating groups within Facebook to engage them, building idea communities, and identifying and energizing customers by monitoring blogs and social networks. Failing to engage with these customers is a big mistake. Furthermore, although the company had identified two separate segments, we recommended using the same programs for both segments, since they have such similar profiles.

The third segment, shown in orange, features 61% Inactives and only 20% Joiners -- well below average. We recommended spending marketing money on this segment elsewhere, rather than on social programs, which would be difficult to get going with a profile like this.

One final note. Both in this project and another similar one for a beverage company, we found the companies had difficulty identifying their own segments! The first time this happened, I found it strange, but twice made me think it's a pattern. For any companies out there planning or implementing a segmentation, remember: you need some mechanism to identify who's in those segments. If you think segementation leads to insight and then you're done, you'll may find it frustrating (as we did) to take those segments further into a realm like targeting for social applications.


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John Gillett

Excellent data chart! The segmented social media users are reminiscent of the psychographic segments applied by SRI's Values & Lifestyles (VALS) program -- of course updates for the world of web 2.0!

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