Market segmentation analysis is about identifying large groups of customers and prospects based on certain characteristics that can align with your business objectives and provide market opportunities for growth.
Your products and services are not for everybody. Even if you are lucky to serve large parts of the population (e.g. Amazon), customers and potential customers will come to you for different reasons and use your products and services in different ways.
Similarly to personas research, the main reason for doing this type of research is that you are not the user, and again your products are not everybody. If you are a user of your own products, you are likely to represent a very small and biased segment of your customer base. You are invested in the company like no user will ever be.
To find new market opportunities with useful, usable, and appealing products and services you have to understand who your customers and prospects are and what they need. Segmentation analysis is the tool for that.
Segmentation analysis is primarily in quantitative research but often includes qualitative research prior to quantitative research to identify relevant variables the may discriminate best among the segments. Qualitative research can also be used after the quantitative research to get a richer profile of the segments to build detailed segment profiles and personas. Quantitative research is based on survey methodology but can be combined with transactional data collected by the client (e.g., products purchased, the dollar amount spent, purchase frequency, etc.).
It’s also important to get key stakeholders involved in the research process to facilitate the implementation of the results, particularly if there is interest in personas development. We always recommend kicking off the project in meetings with key stakeholder groups.
Relevant Insights can recruit qualified B2C and B2B participants through our sample provider partners for both qualitative and quantitative research. Relevant Insights can also recruit participants from your customer database and will implement procedures to protect any identifiable personal information.
As an alternative, you may also recruit directly from your own customer database if data privacy restrictions don’t allow for customer data sharing. In these cases, we will provide the necessary data collection tools or work with your data collection tools (i.e., survey tools) if the data is required to stay in the account.
After discussions with you, we determine the sample parameters and assist in developing screeners. We also manage participant incentives.
In market segmentation analysis we look for discrete, identifiable, and actionable segments where the client can grow their business. The data is presented by the segments, which are profiled using metrics related to their needs, motivations, attitudes, and behaviors
The type of information included in segment profiles will depend on the product category and industry, and the scope of the segmentation. If there is interest in developing personas from the segment profiles, more qualitative and granular information needs to be collected.
In market segmentation analysis, we can develop a predictive algorithm to identify segments/personas in future research the client may do. Different multivariate statistical and trade-off techniques are used to identify the segments, including:
Four to eight weeks for qualitative research.
Six to eight weeks for quantitative research.
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